WAAY 31 I-Team Investigation: Pharmacist Gag Clauses

Many Alabama pharmacists don't like having their hands tied by Pharmacy Benefit Mangers. The PBMs can require contracts that prevent pharmacists from giving patients the best deal on prescriptions.

Posted: Sep 25, 2018 3:34 PM
Updated: Sep 25, 2018 7:01 PM

WAAY 31’s I-Team investigation exposes a practice that results in some of you paying too much for your prescriptions when you use your insurance. Many pharmacists in Alabama insist they want to be able to tell you when paying cash is cheaper than your insurance co-pay. They blame third-party administrators who insurance companies hire to negotiate with pharmacies. You may not even realize you have a Pharmacy Benefit Manager, also known as a PBM, but they're widespread and powerful.

WAAY 31 reveals the costly reason why PBM contracts can keep pharmacists from telling you the whole story and how State Senator Arthur Orr is working to outlaw Pharmacist Gag Clauses.

Tommy and Martha Sharp depend on their prescription drugs. We talked with Martha who had gathered several prescription bottles to show us. The drugs are a critical part of the Sharps' everyday lives. "It's kept me on track as far as health issues,” Martha told WAAY 31. “My husband as well. He's just suffered a stroke. And they’re very important for him."

Martha trusts the folks at her pharmacy with her life. "There is a lot of trust,” she explained, “almost like family sometimes." This trusting patient was astonished to hear what's happening in Alabama. Pharmacists can be required to keep secrets from patients like the Sharps. Those secrets could be valuable information that could save patients money.

Martha told us she was surprised when we told her about the Pharmacist Gag Clauses. "I am,” she said. “I always thought I was getting the best deal."

Senator Arthur Orr is determined to stop the practice. "The pharmacy shouldn't have their hands tied to tell the customer what's best for the customer when it comes to the price of their drugs," he told WAAY 31. Senator Orr says he wants you to get the best possible price on your prescriptions.

That might be at odds with Pharmacy Benefit Managers. Insurance companies hire PBMs to dictate terms including co-pays. Trouble is, the co-pay may be more than you have to pay. The senator wants to stop PBMs from forcing pharmacists to keep quiet when paying cash is cheaper than your co-pay.

"They want to be able to tell their customer that there is a lower price alternative if they don't use their insurance card and that it could cost them much less if they just paid the over-the-counter price for that particular drug," Orr told us.

Senator Orr’s effort is getting support from pharmacists in the state.

"We could, in effect, sell it to you at a lower price,” Bob Giles told WAAY 31. “We are restricted and can’t really tell the patient that.” Giles is the government affairs director for the Alabama Pharmacy Association. He explained pharmacists worry about the growing power of PBMs.

They're not the only ones worried.

The Cato Institue calculates PBMs now control prescription benefits of at least 266 million Americans.

Giles says he’s seen PBMs control up to 98 percent of a pharmacy’s prescription business.

PBMs can basically tell pharmacists to take or leave it. Giles said his colleagues have little choice but to agree to “the contracts that we're required to sign as pharmacists," he said. "And pharmacies do this every day in order to accept your insurance."

The contracts -- complete with Pharmacist Gag Clauses -- could cost you big money. For example, your co-pay may require you to pay $50 for a prescription. But, the cash price for the drug may be just $10. That means you paid an extra $40 -- profit for a Pharmacy Benefit Manager.

"It's not good for anyone,” Giles insists. “The only thing that the gag clauses are in there for are to prevent transparency in the PBM marketplace. They're the ones that are profiting the most right now. And they don't want you to know how much money they're making."

Giles told WAAY 31 that regulating PBMs and being transparent with patients is now the top priority of the Alabama Pharmacy Association. "I can tell a cash-paying customer almost anything,” he explained. “If you have insurance, you're dictated by the PBM contract what we can and cannot disclose to you."

"I've got a bill ready,” Senator Orr told WAAY 31. “And I'll be ready the first day of the legislative session in March." Senator Orr says he typically prefers a free market solution. But, for the problem of Pharmacy Gag Clauses, lawmakers may have the only cure. "I think that's the way we're going to have to go to get the customer the true market price for those drugs that they need and rely on."

Martha Sharp says Senator Orr's law can't come soon enough. "That would be great,” she told us. “That would be great especially as you can see we use a lot of prescription drugs to benefit our health. And it would definitely save us money to know that we're getting the best price.”

Senator Orr says he's getting bi-partisan support for a bill to outlaw the Pharmacist Gag Clauses in Alabama.

Aside from the support from the Alabama Pharmacy Association, the National Community Pharmacists Association is also working to end gag clauses. It supports federal legislation in addition to state laws.

Huntsville
Clear
48° wxIcon
Hi: 69° Lo: 46°
Feels Like: 45°
Florence
Clear
51° wxIcon
Hi: 72° Lo: 46°
Feels Like: 51°
Fayetteville
Clear
47° wxIcon
Hi: 69° Lo: 45°
Feels Like: 43°
Decatur
Clear
49° wxIcon
Hi: 70° Lo: 49°
Feels Like: 45°
Scottsboro
Clear
48° wxIcon
Hi: 69° Lo: 47°
Feels Like: 48°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Cases: 530011

Reported Deaths: 10946
CountyCasesDeaths
Jefferson763591519
Mobile40875804
Madison34676503
Tuscaloosa25717451
Montgomery24308585
Shelby23389248
Baldwin21093307
Lee15844169
Calhoun14481313
Morgan14281279
Etowah13813353
Marshall12203222
Houston10553280
Elmore10036205
Limestone9952150
Cullman9647193
St. Clair9634239
Lauderdale9413241
DeKalb8821185
Talladega8210175
Walker7222277
Autauga6914108
Jackson6803111
Blount6645136
Colbert6291134
Coffee5503118
Dale4826111
Russell440038
Chilton4263111
Franklin425482
Covington4120117
Tallapoosa4006152
Escambia393276
Chambers3559123
Dallas3544151
Clarke350861
Marion3111100
Pike310177
Lawrence299898
Winston273772
Bibb260463
Marengo249164
Geneva248777
Pickens233760
Barbour230757
Hale222577
Butler215869
Fayette212062
Henry188744
Cherokee184345
Randolph179941
Monroe177040
Washington167039
Macon158650
Clay155956
Crenshaw151957
Cleburne148741
Lamar141834
Lowndes138553
Wilcox127029
Bullock123041
Conecuh110129
Perry107526
Coosa107128
Sumter104332
Greene92334
Choctaw60424
Out of AL00
Unassigned00

Tennessee Coronavirus Cases

Cases: 852072

Reported Deaths: 12245
CountyCasesDeaths
Shelby955251616
Davidson89317933
Knox50606634
Hamilton44219493
Rutherford43026434
Williamson27986217
Sumner23978349
Montgomery20232225
Wilson18779233
Out of TN1839297
Unassigned17048134
Sullivan16760294
Blount15486193
Bradley15010149
Washington14582245
Maury13493172
Sevier13377175
Putnam11376175
Madison11164242
Robertson9755131
Anderson8758172
Hamblen8604173
Greene7864155
Tipton7349103
Coffee6903121
Dickson6835110
Cumberland6726132
Carter6628158
Gibson6524145
McMinn650698
Bedford6502128
Roane6281105
Jefferson6198124
Loudon612469
Hawkins6050107
Lawrence593087
Monroe583795
Warren554881
Dyer5423106
Franklin514690
Fayette506177
Cheatham454755
Obion453896
Cocke449699
Lincoln435263
Rhea434375
Marshall418658
Campbell415463
Weakley412564
Giles3995100
Henderson378876
White363270
Macon361778
Carroll361483
Hardin357167
Hardeman351864
Lauderdale318544
Henry317976
Claiborne317773
Marion312547
Scott311645
Overton300861
Wayne296134
Hickman283846
McNairy281654
DeKalb279554
Smith277439
Haywood271162
Grainger262550
Trousdale250022
Morgan249739
Fentress241347
Johnson240839
Chester214351
Bledsoe214011
Polk207624
Crockett203448
Unicoi203449
Cannon192031
Union190534
Humphreys179526
Grundy179234
Lake170326
Sequatchie169729
Benton165940
Decatur158639
Lewis158126
Meigs138825
Stewart132428
Jackson131936
Clay110131
Houston109333
Perry106628
Moore101017
Van Buren84623
Pickett75924
Hancock58912

Community Events