New law removes the veil over rising prescription drug costs

DATE: April 3, 2018

Published by the Orlando Sentinel

Americans spend more per capita on prescription drugs than any other high-income country in the world. Many states have wrestled with the rising costs of these medications, particularly in Florida.

Recent data show that a great share of the rising costs can be attributed to the business practices of pharmacy benefit managers, third parties who are hired by health plans to manage the prescription-drug benefits of over 266 million Americans.

Although PBMs were originally created to help reduce drug costs, the opposite has proved true. Their position as intermediary between insurers, drug manufacturers and pharmacists has given PBMs a uniquely central role in the drug market; they now handle everything from setting patient copayment amounts to determining which drugs are covered by which health plans.

PBMs have a significant impact on Florida patients and their ability to obtain the medications they need in a timely and affordable manner, and yet very little is known about their role. Thankfully, Florida’s lawmakers listened to the concerns of constituents who depend on prescription medications and passed a bill this past session that would add transparency and accountability to the pricing process for prescription drugs.

Gov. Rick Scott signed the bill into law in March.

Once effective, the measure will provide an additional level of oversight for PBMs operating in Florida by requiring them to register with the Office of Insurance Regulation, and will go a long way in bringing about a level of transparency to the PBM industry.

Furthermore, by imposing restrictions on PBMs regarding cost, the law will help ensure Florida patients do not pay any more than they must for the medications they need. Although patients often assume that their copayment amount will be less than the retail (“cash”) price of a drug, this is not always the case. Unfortunately, pharmacists are often prohibited by PBMs from telling customers about lower cost options, and are sometimes even obligated to charge a customer the applicable cost-share amount, even if the retail price for the drug is less.

The new law addresses these practices by prohibiting PBMs from charging patients an amount at the point of sale that is greater than the retail price of the drug prescribed. Moreover, it bars PBMs from including in their contracts with pharmacies gag clauses that restrict pharmacists from conveying cost information to customers.

As president of the Florida Society of Rheumatology, I am thrilled to see this new law put the patient back in the driver’s seat. Floridians deserve to know when they can pay less for a drug they critically need to treat their ailments, and this law is a major victory for patients across the state.

I applaud Florida for taking these important first steps towards lifting the veil of secrecy from the complex and opaque PBM industry and bringing about a more transparent, patient-centered drug-delivery system in the United States.

Robert W. Levin, M.D., is president of the Florida Society of Rheumatology and the Alliance for Transparent and Affordable Prescriptions, a coalition of patient and provider organizations working to lower prescription costs and make treatment more accessible.