- Prohibiting a health plan or pharmacy benefit manager (PBM) from directing a pharmacy to charge a patient an amount greater than the pharmacy’s cash price or the net reimbursement to the pharmacy. This ensures that regardless of any co-pay gimmicks, the patient will pay the lowest possible amount at the pharmacy counter.
- Prohibiting a health plan or PBM from forcing a pharmacist to remain silent when it comes to the financial details and options of their patients’ medications.
Clawback is a tool PBMs use to over-inflate the cost of prescription medications at the point-of-sale transaction. Essentially, a PBM clawback forces some pharmacies to charge customers more than the pharmacy’s cash price. The PBM then “claws back” the money the patient was overcharged.
Another practice used by PBMs is gag restrictions. A contractual gag prevents pharmacy employees from discussing all prescription costs with their customer.
The practice of clawbacks and gag restrictions have been witnessed in every state and has resulted in more than a dozen lawsuits across the country.
- Most people believe that their co-pay is their portion of a shared payment with their insurance company for a particular medical or pharmacy service. However, a clawback is when the patient pays for the entire cost of the service and an extra hidden payment to the insurance company’s PBM middleman. A news reporter in New Orleans dubbed this as not a co-pay; but instead, it’s a “you-pay.”
- The legislation will ensure that patients are getting the best deal possible at the pharmacy counter and aren’t in the dark on PBM drug pricing shell games. A recent analysis by a mid-sized pharmacy chain in Ohio found hundreds of clawbacks in the last three months, with 50 of them meeting the “double trouble” standard of the pharmacy losing money on the transaction, as well as a PBM clawback equal or greater than $10.
Most clawbacks are relatively small, ranging from a few cents to $5-7 in most cases. However, there are many transactions where patients are overcharged by more than $20. Some of the most egregious clawbacks occur in Medicare Part D, where overinflated co-pays not only pinch patient’s wallets, but they also race patients into different deductible phases, which has been found to cost taxpayers billions of dollars.
HB 479 now goes to the Ohio Senate for consideration. The bill is not expected to move immediately as the Ohio General Assembly is recessing for campaigns and will likely not be back in session until after the November general election.