On Thursday, May 31, Governor Edwards signed SB 283, a bill authored by Sen. Fred Mills.
This legislation did not receive a lot of coverage during the regular legislative session but was a big accomplishment in the ongoing fight to lower the cost of prescription drugs. This law will restrict one of the biggest drivers of high prices for medications, Pharmacy Benefit Managers (PBMs).
It will bring a more transparent health care system and, importantly, smaller hits to your wallet when you visit your local pharmacy.
When you go to pick up and pay for a prescription you might not realize how many negotiations and back-room deals determine which brand of medication you receive and how much you pay for it. PBMs are the hidden middlemen between the insurance company and the pharmacy and have unprecedented say in your health care treatment.
Thanks to new legislation that just passed the state legislature, the power of the PBMs will soon be curbed in Louisiana.
When PBMs were first created, they were intended to lower the cost of prescription drugs by negotiating with the pharmaceutical companies and the health care plans to get the best price possible for consumers. Since then, they have transformed into powerful companies that have more than 40 different revenue streams. These companies can dictate physician practices through health plan requirements, collect high-dollar rebates from drug manufacturers to drive their medication coverage decisions, offer take-it or leave-it contracts to independent pharmacies and prevent pharmacists from divulging cheaper pricing options to consumers, known as the “gag clause.”
Today, little of their business model achieves the original purpose of PBMs - to actually lower the costs of medications for patients.
The prescription drugs that health insurance plans will cover are often dictated by the size of the rebate the PBM can receive from a manufacturer. PBMs then require a patient to pay more for the drug by using their insurance or co-pay rather than paying out of pocket, thereby maximizing the PBM’s profit.
This is a contributing factor to the rising cost of health care for patients across the country and can limit the ability for patients to receive the best medications possible for their condition.
Just in the last month, I filled a prescription that required a specific generic manufacturer of Methylphenidate extended release, while a cheaper generic by another manufacturer was available. The patient could have saved more than $100 by paying cash for the cheaper generic. However, because of the gag clause, I was unable to tell them about the cheaper option and help them save money.
The PBM industry is largely unregulated and the gag clause prohibits pharmacists from disclosing the unfair business practices of PBMs to plan sponsors, drug manufacturers and patients.
Senate Bill 283 is crucial to reigning-in the unfair and deceptive trade practices of PBMs. I want to commend the Legislature for passing legislation that will help lower health care costs for consumers.
David Darce, Pharmacist
St. Martinville, LA
Posted on Tue, June 5, 2018
by The Lafourche Gazette