Industry News: What is a Pharmacy Benefit Manager (PBM) Clawback Clause?
September 12, 2018
Last year, I noticed that a drug I used to pay less than $10 a month for suddenly became subject to a $10 copay when I purchased it at my normal pharmacy. I questioned the pharmacist, who said I needed to call my insurer to find out why the cost had gone up. However, when I read my pharmacy bag tag, I noticed that it was missing the “your insurance saved you $XX” line, which I have made a habit of noting through the years. I questioned the pharmacist again and received a quick, “Ma’am, you’re going to have to question your insurance company.”
What I didn’t know at the time, but know now, is that the pharmacist was under a “gag order” by her contract with my insurance company’s Pharmacy Benefit Manager (PBM). She was legally bound to not tell me that if I had not used my insurance I would still be paying that lesser cash price rather than the $10 copay. It turns out that if that pharmacy agreed to service patients that were part of that PBM’s network, their network contract PBM likely contained a “gag order” provision that superseded my rights as a patient and consumer. After learning about this practice my first question was, “Who kept the difference that I was paying?” The answer: The difference between the cash price for the drug (if lesser) and the PBM copay amount was sent back to the PBM to offset the cost of the overall health plan.
On April 3, 2018, the Ohio Department of Insurance (ODI) issued bulletin 2018-02 (referenced below), a clarification that gag orders and clawback clauses are not accepted practices in the state of Ohio. Multiple lawsuits have been filed against multiple PBMs in several states. Some PBMs are defending the practice, while others have stopped using it altogether.
Understanding new practices in the pharmaceutical market can be important when choosing a potential partner for pharmacy benefits. With that in mind, it is important to check if these practices are legal in your state.
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