As part of President Trump’s blueprint to lower drug prices, CMS is warning Medicare Part D Prescription Drug Plans (PDPs) that so-called “gag clauses” aren’t allowed and that their network pharmacies must disclose when the Part D plan price or copay of a drug is more than the cash price. Yet analysts say it’s likely to affect only a small percentage of PDPs.
According to Derek Frye, practice leader, audit and compliance with the Burchfield Group, in his experience, the gag clauses affect fewer than 5% of all PDP plans. “These ‘gag clauses’ that allow this may not be explicit in the contract between the plan and the PBM or even between the plan and the pharmacy. Instead, they might be buried in client setup documentation that was exchanged between the plan and the PBM when the adjudication system was set up for the plan year,” he adds.
At least 10 states have enacted laws this year that banned gag clauses, while in total, at least 22 states now have laws prohibiting gag clauses on their books.
Yet in some states, some PBMs place within the contract with their network pharmacies clauses stating that the pharmacies are not allowed to disclose that the cash price for a drug is less than the copay, unless the patient asks first, according to Anne Marie Youlio, Pharm.D., program lead, pharmacy solutions & compliance at Attac Consulting Group.
The challenge with the new CMS policy “is that pharmacies will now be on the front line of having to determine, based on each of their contracts with PBMs, whether the contract includes the ‘don’t ask don’t tell’ clause, [and] which specific line of business that the patient is covered by” to determine whether they can disclose the cash price, Youlio says. And this isn’t necessarily simple to accomplish at the retail level, she adds.