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I read in the news article Why do the insured pay more for prescriptions? (mirror):

Eight states (including Texas) have enacted legislation authorizing pharmacists to tell their patients that their drugs would be cheaper if they just paid cash and/or prohibiting clawbacks.

Is it illegal for pharmacists to tell their patients that their drugs would be cheaper if they just paid cash and/or prohibiting clawbacks in the other states? (vs. using the insurance to purchase the drug)

Context for those unfamiliar with the US health insurers. From {1}'s abstract:

Prescription drug overpayments (also known as “clawbacks”) occur when commercially insured patients’ copayments exceed the total cost of the drug to their insurer or pharmacy benefit manager. In 2013, almost one quarter of filled pharmacy prescriptions (23%) involved a patient copayment that exceeded the average reimbursement paid by the insurer by more than $2.00. Among these overpayment claims, the average overpayment is $7.69.

References:

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    @PoloHoleSet Van Nuys, Karen, Geoffrey Joyce, Rocio Ribero, and Dana P. Goldman. "OVERPAYING FOR PRESCRIPTION DRUGS: THE COPAY CLAWBACK PHENOMENON." (2018).):
    – Franck Dernoncourt
    Apr 25, 2018 at 17:07
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    @PoloHoleSet: In the examples in question, the full price of the drug is lower than the copay. But because people didn't know that, they were paying the copay anyway, and the benefit manager keeps the difference.
    – Nate Eldredge
    Apr 25, 2018 at 17:08
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    @PoloHoleSet " Prescription drug overpayments (also known as “clawbacks”) occur when commercially insured patients’ copayments exceed the total cost of the drug to their insurer or pharmacy benefit manager. In 2013, almost one quarter of filled pharmacy prescriptions (23%) involved a patient copayment that exceeded the average reimbursement paid by the insurer by more than $2.00. Among these overpayment claims, the average overpayment is $7.69"
    – Franck Dernoncourt
    Apr 25, 2018 at 17:09
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    @NateEldredge - Thanks for the clarification (you too, Frank). That was not obvious from the way the question was worded, and I was blocked by the firewall at work from reaching the linked article on my break time. Perhaps wording the question, itself, with "would be cheaper than their co-pay" would make it stand on it's own, better, and make it clearer that we're talking cost to consumer vs overall cost.
    – PoloHoleSet
    Apr 25, 2018 at 18:06
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    It took me a while to grasp the concept of "clawbacks". US's health system is really full of surprises...
    – Evargalo
    Apr 26, 2018 at 12:14

1 Answer 1

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There's a link in the article explaining the situation - see "gag clauses".

Pharmacies negotiate contracts with benefit managers to set the prices of drugs and other terms regarding how they will be sold. One of those terms might be that the pharmacists are not allowed to tell the patients their drug would be cheaper if they paid cash.

So it depends what you mean by "illegal". If the pharmacist told the patient the drug would be cheaper, it wouldn't be a crime or a violation of statute, but it would breach the pharmacist's contract with the manager. The manager could then sue the pharmacist for damages.

The states in question have presumably enacted legislation that makes such terms invalid, so that even if they are in the contract, the manager can't sue to enforce them or collect damages if they are breached.

(Also, you've mis-parsed the sentence. It should be "Eight states have enacted legislation ((authorizing pharmacists to tell their patients that their drugs would be cheaper if they just paid cash) and/or (prohibiting clawbacks))". So some of those states have enacted legislation prohibiting clawbacks (which are explained in the article). The "prohibiting clawbacks" clause isn't part of what pharmacists are authorized to tell.)

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    In other words - It's not illegal, but the 8 states mentioned make clauses forcing that kind of behavior non-enforceable in pharmacy contracts.
    – Zibbobz
    Apr 26, 2018 at 18:13
  • Sue for Breach of Contract. Damages would be defined therein
    – user36356
    Apr 28, 2018 at 14:24
  • Surely the restriction would not be on telling the patient the cash price is lower, but on volunteering that information. If the patient broaches the topic, the pharmacist isn't going to have much choice except to reveal the cash price.
    – Ben Voigt
    Mar 4, 2019 at 4:15

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