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Elimination of PBM Gag Clauses Allow Independent Pharmacies to Save Patients Money on Prescription Drugs

The CBS 11 Dallas Fort Worth news team asked local pharmacists to ring up the prices of commonly used medications, first, with a popular insurance plan, then the same drug for someone without insurance. Here are two examples of real cases where insured patients paid more.

1) Valacyclovir is a common anti-viral drug used to treat cold sores, chicken pox and shingles. The copay amount with a popular insurance plan is $50, but if you never told the pharmacist you had insurance, the drug would cost $26.67 out of pocket.

2) Armour-throid, used to treat an under-active thyroid, has a copay cost of $150 with a common insurance plan. Without insurance the price is $39.21, a difference of more than $110.

This billing practice is known as a “clawback” and you may have no idea it’s happening. These clawback monies are a contributing factor to significant overpayment for pharmacy benefits management services.

Watch this short video for a demonstration on how clawbacks work.

While pharmacists have known about this price discrepancy for years, in many cases they have been prevented from telling their customers. Gag clauses in contracts made by insurers and pharmacy benefit managers (PBMs) often prevented pharmacists from discussing alternative price options with their customers. However, last year the federal government made these gag clauses illegal.

Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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