Four freshman Republican lawmakers are taking on the middlemen in the drug pricing process with a bill that would prohibit pharmacy benefit managers from inserting gag clauses into contracts with pharmacists barring them from telling patients about cheaper ways to acquire drugs.
The legislation, which GOP Assembly members Melissa Hardy and Glen Leavitt presented to the Assembly Commerce and Labor Committee on Monday, would bar pharmacy benefit managers, or PBMs, from stopping a pharmacist from telling patients about the availability of a less expensive, generic or more effective drug, or a less expensive manner of purchasing a drug. The proposal builds upon a pharmacy gag ban passed by the Legislature in 2017 that prevented PBMs from blocking pharmacists from sharing information about the copay or coinsurance for a prescription drug or the clinical efficacy of a less expensive alternative drug.
Assemblywoman Melissa Hardy acknowledged the steps that the 2017 bill made toward ensuring patients receive the lowest prices for their drugs but said that “additional clarification is needed.”
“Assembly Bill 141 expands on these prohibitions with the aim of giving patients access to the most effective drugs at the best price possible,” Hardy said. “It is a straightforward bill that makes some common sense changes.”
PBMs, in the shadowy and often-confusing world of drug pricing, act as the go-between for insurance companies, pharmacies and manufacturers and take a cut of the discounts they negotiate and the rebates they receive from manufacturers to do so. Drug companies, recently in the crosshairs of lawmakers both in Nevada and nationally over rising drug costs, have pointed their fingers at PBMs and argued that they aren’t passing the savings they receive onto consumers.
The drug-pricing middlemen have also come under scrutiny for including gag clauses in contracts that prevent pharmacists from telling patients when the sticker price of the drug is actually less than the cost of their insurance copay. In line with those concerns, 29 state legislatures, including Nevada, have passed laws prohibiting pharmacy gag clauses in PBM contracts between 2015 and 2018.
Supporters of the legislation, including the American Cancer Society Cancer Action Network and the Nevada Cancer Coalition, testified that the changes would go a long way toward ensuring patients are paying the lowest costs for their prescription drugs. The American Cancer Society’s Nevada lobbyist Tom McCoy said that even he personally experienced a situation where his co-pay for two generic drugs would have been $30 with insurance but only $4 at the cash price.
“The result of this practice means that some Nevadans are paying more than they need for their needed medications,” McCoy said.
One mother, Kelly Gonzalez, voiced her own ire during the hearing with OptumRx, the PBM owned by the nationwide insurer UnitedHealthcare who she said forced her daughter into using a less-than-effective treatment for a genetic blood disorder, resulting in extensive hospitalizations and missed school.
“Because the PBM is saying, ‘Use our pharmacy and our medications,’ things like this happen with my child — 11 hospitalizations in 13 months, 47 days of missed schools,” Gonzalez said. “As a former school teacher I don’t want any of my students missing 47 days, but my daughter missed it and it was all due to United Health Care’s PBM determining that another medication is what they think is sufficient without checking with a qualified provider.”
A lobbyist representing the Pharmaceutical Care Management Association, the trade association for drug pricing middlemen, told the committee that PBMs support the majority of the bill except for one provision that allows all pharmacists to discuss “alternative methods of acquiring a drug which may result in a lower cost for the drug.” The lobbyist, Paul Young, said that section of the bill would allow patients to use coupons from pharmaceutical companies that could decrease the costs for patients in the short term but increase overall health-care costs in the long run.
“There is an appeals process, as well, for the patients to stay on the brand drug if need be,” Young said. “However, in general, they can move to a generic drug which is ultimately cheaper, which is a cheaper cost for the overall health-care industry.”
The Retail Association of Nevada, which represents retail pharmacies, also expressed concerns that the “alternative methods” provision of the bill was too vague and asked for clarification from the bill’s sponsors.
Though they seemed largely supportive of the legislation’s overall goal of lowering drug costs for patients, lawmakers expressed some concern during the hearing that allowing pharmacists to talk to patients about generic or “more effective” drugs would effectively put pharmacists in a prescribing position without knowing a patient’s full medical history.
“Pharmacists don’t prescribe. Some things can’t be substituted. Some patients can’t take generics,” said Assemblywoman Maggie Carlton. “I know my husband is one of those on a certain line of blood pressure medicines, he cannot take generics. They have a very bad side effect but a pharmacist wouldn’t know that. The doctor would.”
Nevada State Medical Association Executive Director Catherine O’Mara voiced similiar concerns that the legislation could put pharmacists between the doctor and the patient, though she said the association is overall supportive of the goal of the legislation.
Leavitt, one of the bill’s co-sponsors, told committee members that the goal of the legislation is to allow pharmacists to share all available options with a patient. If the patient wants to seek out an alternative drug, he or she would have to return to the doctor for a new prescription, he said.
“We believe that pharmacists are knowledgeable on certain things,” Leavitt said. “They’re aware of certain types of drugs and how they work. However, we don’t want them to prescribe them. We just want them to notify that, ‘Hey, I read about this drug that looks like it might be helpful to you. Go seek the consultation of your doctor. If I’m right, then come back with a prescription for that drug.’”
Democratic Assemblyman Steve Yeager also questioned during the hearing whether the legislation would apply to contracts between PBMs and pharmacies owned by the same company, such as the PBM CVS Caremark and the CVS retail pharmacies. Hardy said that “in an ideal world, yes I would like it to.”
“Those are things we’re discussing and hopefully can reach some agreement on them,” Hardy said.