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May Legislative Update: Applauding how ODI edict aims to prohibit clawbacks and "gag orders"

Antonio Ciaccia, Director of Government & Public Affairs and Michelle Fitzgibbon, Lobbyist

OPA applauds a recent announcement from the Ohio Department of Insurance (ODI) on an immediately effective edict that aims to prohibit pharmacy benefit manager (PBM) co-pay clawbacks and pharmacist “gag orders.” OPA thanks ODI for their proactive action in addressing these issues that result in unnecessarily high costs for patients at the pharmacy counter.

Through their announcement, ODI has effectively prohibited PBMs and/or health insurers from engaging in each of the following practices:

  1. 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.
  2. 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 the complete ODI Bulletin that contains the exact language and rationale, visit https://www.insurance.ohio.gov/Legal/Bulletins/Documents/2018-02.pdf.

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

 

HB 479: Prescription Drug Co-Pay Integrity Act

The move above from the Department complements our efforts on HB 479, the “Prescription Drug Co-Pay Integrity Act,” which is legislation currently being pushed by Representatives Scott Lipps (R-Franklin) and Thomas West (D-Canton). HB 479 would further the scope of prohibited clawbacks and ensure that no future regulatory changes could remove the new ODI policies.

The push for PBM reform continues, and with our Ohio Prescription Partnership coalition now at nearly 30 organizations, we will work to see HB 479 advance through the General Assembly.

“While we believe the need to permanently codify this issue remains crucial, we thank ODI for their initiative to do what is within their power to provide much-needed transparency, and to ultimately protect consumers,” said OPA Executive Director Ernie Boyd. “This is a welcome step in the right direction, and Director Froment and the Department are to be commended for their work.”

“The announcement from the ODI, regarding the elimination of gag rules in pharmacy contracts, is exciting and long-overdue news!” said Rep. Scott Lipps. “I now look forward to codifying ODI’s efforts in law through our even further-reaching HB 479. Ohioans deserve assurance they will be protected from opaque pricing gimmicks.”

“I applaud the Department of Insurance’s decision to put hard-earned money back in the hands of consumers by prohibiting PBM gag orders on local pharmacists that effectively jack up the price of prescription drugs,” said Rep. Thomas West. “While we welcome this long overdue order, we must take the next step and pass HB 479 to ensure that Ohio consumers are protected under the law and not simply at the whim of whoever controls the governor’s office.”

OPA thanks Reps. Lipps and West for their leadership on HB 479, which exposed these opaque pricing gimmicks and created the impetus for other lawmakers and ODI to act. Their efforts will ensure that patients are not paying over-inflated co-pays at the pharmacy counter.

“Ohio is one of the few states to address copay clawbacks and so-called gag clauses by regulation,” said B. Douglas Hoey, CEO of the National Community Pharmacists Association. “Thanks to Governor Kasich’s and Director Froment’s leadership in issuing this pro-consumer bulletin, we look forward to working with the governor and Ohio pharmacists to address other ways PBMs disadvantage patients and locally owned community pharmacies.”

For some recent news stories on the ODI announcement, visit www.ohiopharmacists.org.

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