NJ law would ban hidden cheaper prices for prescription drugs
You might not realize it but you can sometimes wind up paying more for a prescription medication if you use your health insurance than if you had no insurance at all and simply paid the list price for the drug.
Some New Jersey lawmakers are pushing a plan to change that.
Legislation has already passed the state Senate and could soon be voted on in the Assembly that would prohibit insurance companies and organizations called pharmacy benefit managers from charging a higher insurance copayment than the cash price for the medication.
“In many cases the medication may be less expensive if the patient paid out of pocket and they did not use their insurance,” said Elise Barry, the CEO of the New Jersey Pharmacists Association.
She noted the proposed measure would also remove a “gag clause” that currently does not allow a pharmacist to tell a patient they could get their prescription cheaper if they did not use their insurance unless the patient brings up the subject.
Federal legislation signed into law last year also calls for the gag clause to be removed next year.
She said the proposed legislation makes a lot of sense.
“We’re certainly concerned about the issue and we are pleased to be working with the bill sponsors in both houses to move this consumer friendly piece of legislation along and allow the pharmacists in the community to be able to provide the best care for their patients," she said.
She stressed it’s counter-productive to not allow pharmacists to have open and honest dialogue with their customers.
“Pharmacists have extensive knowledge and education in anatomy, botany, physiology, pharmacology, and they are the medication experts. They’re trusted advisors to patients every day.”
She explained the amount you pay for a prescription drug , if you have health insurance, is determined by a pharmacy benefit manager.
She said a PBM is a "third-party administrator of prescription drug programs for commercial health plans, self insured employer plans, Medicare, federal employee health benefit programs and state government employee programs.”
She explained the PBMs are responsible for developing what is called a “formulary,” which is an official list that details which medications may be prescribed at what price, depending on what your insurance coverage is.
She noted each health insurance plan and each level of insurance offered by a company may have a different formulary, which means different people will pay different prices for the same prescription medications.
“And it’s hard to determine how these calculations are done. All the pharmacist sees is a message on their computer screen that directs them to collect a co-pay amount from the patient," she said.
The different prices for the same medication are set by the PBMs for people covered by different insurance companies based on their premiums.
Barry suggested that the public “become their own healthcare advocates and to work closely with their pharmacists to address their health concerns and seek their counsel.”