Vowing it's only the first step in tackling skyrocketing drug prices in the U.S., the House Energy and Commerce Committee unanimously voted Thursday to favorably report to the House floor a bill banning gag clauses that prevent pharmacists from discussing cheaper payment options with insured customers.
"It is not the silver bullet," Rep. Buddy Carter (R-Ga.) said of the bill he sponsored. "It is not the end-all, but it is a step forward."
Rep. Janice Schakowsky (D-Ill.) agreed, adding that "this little bit of transparency at the end of the drug supply chain is only a small part of what we could do." She advised a next step that starts at the top of the chain and shines a light on how drug prices are set.
Congress owes "it to the American people to take a look at skyrocketing drug prices . . . and take meaningful steps toward bringing down the cost," Schakowsky said.
Calling the Know the Cost Act, H.R. 6733, a "good bill," Rep. Frank Pallone (D-N.J.) said, "This legislation cannot and shouldn't be our only effort to reduce drug prices this year."
Given the complexity of drug pricing and the role of every player in the chain, getting rid of the gag clauses that are a common feature in Medicare and private insurance plans "is the easiest fix that will have a significant impact to patients," Lindsay Bealor Greenleaf, a director at ADVI Health, told BioWorld.
It's a modest fix that enjoys bipartisan support in both the House and Senate. While the House bill would ban gag clauses across the board, the Senate passed a bill last week to prohibit them in Medicare plans. It's prepared to vote on a separate bill next week that would eliminate the clauses in exchange plans and employer-sponsored health policies.
However, the Senate first will have to vote on an amendment, offered by Sen. Mike Lee (R-Utah), that would restrict the ban in the private sector to self-insured plans that are mostly regulated by the federal government. Under Lee's amendment, it would be up to states to prohibit the clauses in the private plans they regulate.
In discussing the need for the Know the Cost Act at Thursday's committee markup, Rep. Gene Green (D-Texas) said the gag clauses are a problem in both Medicare Part D plans and private insurance coverage. He cited a study published in the Journal of the American Medical Association that showed nearly one in four patients pay a copay that exceeds the price of the drug.
That's about the same percentage of Americans who struggle to cover their prescriptions, according to a Kaiser poll Green referenced. That same poll showed 37 percent don't fill a prescription or skip or reduce a dose to lower their out-of-pocket cost. Meanwhile, pharmacists are often prohibited, by their contracts with insurers, from telling those patients that the cash price of the drug might be less than the insurance copay.
Green said a recent survey by the National Community Pharmacists Association found that 58 percent of the pharmacists have been restricted by gag clauses at least 10 times in one month.
Getting rid of gag clauses is critical for patients, Bealor Greenleaf said, adding, "The fact that it's been allowed to go on this long is . . . outrageous." She noted that the impact of gag clauses has become much more extensive since the Affordable Care Act was passed in 2010 and drug manufacturer contracts with pharmacy benefit managers started artificially inflating list prices. The problem isn't restricted to brand drugs, as many generics also are experiencing high markups, she said.
A second Congressional step aimed at reining in drug prices faltered Thursday when House and Senate appropriators conferencing on a spending bill for the Department of Health and Human Services scuttled an amendment that would have required companies to list prices of their prescription drugs in direct-to-consumer (DTC) ads. The Senate had passed the amendment, which was not included in the House version of the spending bill. (See related story.)
"Last year, the pharmaceutical industry spent more than $6 billion in DTC advertisements, which drive up health care costs by steering patients towards more expensive, often unnecessary medications," said Sen. Dick Durbin (D-Ill.), sponsor of the bipartisan amendment.
"The average American sees nine DTC prescription drug ads each day," Durbin said, citing studies showing that patients are more likely to ask doctors for a specific brand drug, and doctors are more likely to prescribe one, when those drugs have been advertised.
While the amendment won't be part of the spending bill, it is likely to come back in a different bill as the idea has a lot of support in Congress. But Bealor Greenleaf questioned whether adding a price to an ad would make much difference. There's a lot of confusion about what that would look like, she said. For instance, which price would have to be included? For which dose? And what does that really mean for the patient?
Their out-of-pocket cost is what matters to patients. Those costs vary widely among insurance plans and may not be tethered to a price given in an ad. Thus, requiring pricing in drug advertising "adds more confusion than clarity," Bealor Greenleaf said.
It also could have a perverse effect if patients associate high price with value, especially if they don't have to pay the full price for the drug.
Lawmakers aren't the only ones pushing back against prescription drug prices. As they experience rising out-of-pocket costs due to drug prices and high copays, insurance premiums and deductibles, patients are becoming more aggressive and informed about shopping around for the best price for their prescriptions, Bealor Greenleaf said. And doctors are increasingly discussing treatment options and pricing with their patients.
"There is a greater awareness now than there was in the past about researching all the options," Bealor Greenleaf said.