Legislation re-introduced to end PBM co-pay clawbacks & gag orders!

Rep. Thomas West & Rep. Scott Lipps The fight to lower drug costs for Ohioans isn't over yet. The Ohio Pharmacists Association (OPA) is pleased to announce that Representative Scott Lipps (R-Franklin) and Representative Thomas West (D-Canton) are again aiming to end a secretive practice that is causing patients to pay more than they should at the pharmacy counter. Specifically, they announced this week that they have introduced HB 63, legislation that would prohibit co-pay clawbacks and pharmacist "gag orders" that stand in the way of lower prices for patients at the pharmacy counter. Additionally, newly-elected Senator Tina Maharath (D-Columbus) companion legislation, SB 14, over in the Senate this week as well!

In the previous General Assembly, Reps. Lipps & West's HB 479, dubbed the "Prescription Drug Co-Pay Integrity Act," sought to prohibit the practice of pharmacy benefit managers (PBMs) requiring pharmacists to charge patients an amount greater than the pharmacy's cash price for a particular prescription drug. Second, the legislation would have prohibited "gag clauses" that some PBMs place in pharmacy contracts that penalize pharmacists for disclosing a complete picture of the financials of a patient's prescription drug transaction. Reps. Lipps & West have reintroduced the language in HB 63. Sen. Maharath's bill has been designated as SB 14.

This issue has received significant attention in the media in recent years, and it all started with a 2016 investigative report from a news station in New Orleans. Similar legislation has already been passed in more than a dozen states. The practice has resulted in more than 16 lawsuits across the country, as well as federal prohibitions on gag clauses signed into law by President Trump in October 2018.

As prescription drug prices continue to grow, 6 in 10 Americans say lowering the cost of prescription drugs should be a “top priority” for lawmakers. In Ohio, despite the failure of the unworkable "Drug Price Relief Act" (Issue 2), a message was sent that something must be done to get drug pricing under control. OPA has worked extensively with lawmakers to address out-of-pocket expenses for patients and to shed light on a problem that OPA members have said must be stopped.

Last year, OPA stood alongside Reps. Lipps & West, and Holly Pendell, director of advocacy and activist engagement for the National Multiple Sclerosis (MS) Society, to announce the bill's introduction. To view that press conference in its entirety, see the Ohio Channel's video HERE. To view the discussion of the bill on the House floor, see the Ohio Channel's video HERE.

It's no secret that OPA has been very outspoken about the problems with prescription drug pricing (see here, here, here, and here). The Columbus Dispatch has spent a full year pulling back the drug pricing curtain in a special Side Effects investigative series that is exposing millions of dollars in drug pricing waste. We've spent a great deal of time working to reform a broken system that rewards big supply chain middlemen and results in higher drug costs for employers, taxpayers, and patients. The "Prescription Drug Co-Pay Integrity Act" is just one attempt at ensuring that patients aren't paying any more than they have to for their needed medications.

"We remain determined to expose and stop the malicious and greedy practices utilized by PBM’s to hurt our citizens and Ohio’s budget. We are excited to reintroduce House Bill 479, from the 132nd General Assembly, which eliminates gag rules and clawbacks. Governor DeWine and his administration are keenly aware of the millions of dollars PBMs have siphoned out of Ohio. It is time for all of us, including the Legislature, Managed Care Organizations (MCO’s) and Medicaid to work together and FIX this," said Rep. Lipps.

"Consumers shouldn’t be priced out of their health care, especially when cheaper options are available," said Senator Maharath.

"The clawback is just the one example of PBM tactics that deceive patients, inflate the cost of prescription drugs, and line the pockets of administrative middlemen," said OPA Executive Director Ernie Boyd. "Pharmacists should not be prohibited from empowering patients to save money, and PBMs should not profit off of the over-inflated co-pays that they set for patients at the pharmacy counter. It's wrong."

Rep. Scott Lipps discusses the need to address high drug prices

Last year, HB 479 passed the House unanimously, but the legislature closed before we could get it through the Senate. Its House passage last year followed a recent announcement from the Ohio Department of Insurance (ODI), which has now effectively prohibited PBMs and/or health insurers from engaging in each of the following practices:

Prohibiting any person, directly or indirectly, from informing, by any means, an individual about less expensive ways to purchase prescription drugs that may also be available under any insurance policy or benefit plan.
Requiring cost-sharing in an amount, or directing a pharmacy to collect cost-sharing in an amount, greater than the amount an individual would pay for the prescription drug if the drug were purchased without coverage under a health benefit plan.

For a complete ODI Bulletin that contains the exact language and rationale, CLICK HERE.

"Needlessly charging Ohioans more for their prescriptions by keeping them in the dark is not defensible," Ohio Department of Insurance Director Jillian Froment added. "We are empowering consumers with more information and helping pharmacists provide their customers with more transparency and potentially cheaper options."

This new legislation from Representatives Lipps & West and Senator Maharath will build upon ODI's edict, and furthermore, it will codify the language in Ohio law.

Rep. Thomas West describes what a PBM clawback is