Here’s what’s going on: Gag clauses are found in some legal contracts between pharmacies and pharmacy benefits managers (the companies that negotiate drug prices between the insurer and the manufacturer and the pharmacy). In the contract, they aren’t referred to explicitly as “gag clauses”—rather, the contracts often include language requiring confidentiality about prices, which many pharmacists have interpreted as prohibiting them from suggesting alternatives.
The net result is that, for patients with insurance, pharmacists charge the insurance price rather than point them towards a cheaper price, if available.
The trouble is that what insurance charges for a drug can often be higher than other available prices. A USC study of Medicare prescriptions found that people overpaid for their drugs by using insurance about 25% of the time. In our own comparisons of insurance prices to discounts available on GoodRx, we have found that insurance can be higher as much as 40% or 50% of the time, depending on a person’s insurance plan and coverage.
So, many people end up paying more for a drug than they could otherwise. Or worse: for many people, high copays mean a prescription goes unfilled and their condition untreated.
So what can an everyday consumer do about gag clauses? Here are five things to know.
1) Don’t expect your insurance to be the best option.
Those of us with insurance expect that it will cover our drugs, and that it will give us a better price than paying cash. After all, that’s what insurance is for. Unfortunately, that’s increasingly not true. Insurance plans are getting more restrictive about which drugs they cover, and higher copays and co-insurance are putting more and more of the cost burden on us. So even if you have insurance, know that it may not be your best bet—and prepare to act.
2) It pays to ask.
Many pharmacists interpret the gag clauses to mean that they can’t volunteer a lower price if someone has insurance. But if the patient asks, that opens the door. And most pharmacists are eager to help their patients find an affordable option. So if you’re hit with a higher than expected copay or price, ask the pharmacist: “Is there another option for a lower price?” They’ll usually try to find some options, including discount programs like GoodRx.
3) Even better: Do some research.
We’re thrilled when pharmacists recommend GoodRx to their customers. But not every pharmacist has the time to search for savings options, or knows where to look. We’ve done that hard work, with a range of options, including discounts and pharmacy membership programs. Sometimes the best thing to do is try another store where prices may be lower. All that information is available for free at GoodRx.
4) Ask your insurance for reimbursement.
If you have insurance, but decide to pay cash instead because you found a cheaper option, don’t let your insurance off the hook. See if they’ll reimburse you for your payment. We’ve put together a list of insurance companies with the necessary claims forms here. Different insurers have different policies, so we can’t guarantee you’ll get reimbursed—but it’s worth trying.
5) Politicians are on the case.
In the past year, many states have passed legislation to forbid gag clauses and allow pharmacists to freely explore payment options with their patients. And now, bipartisan federal legislation is moving through the US Senate that would make gag clauses illegal nationwide. There’s no guarantee this will pass, but it’s another sign that gag clauses have very few supporters, and that pharmacists are seen as essential players to help drive drug prices down.
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