House Insurance Committee testimony 032118

State Rep. Robert Johnson, D-Marksville; Andy Soileau, of Soileau’s Pharmacy in New Iberia; and David Darce, of Thrifty Way Pharmacy in St. Martinville; testified Wednesday, March 21, 2018 for legislation that would allow pharmacists to inform their customers if the cash price for a prescription drug is less than insurance co-pay requirements.

Pharmacists would be allowed to tell their customers how much prescriptions actually cost – and if the drugs could be found cheaper – under a bill that took its first legislative step Wednesday.

Against stiff resistance from a health care industry claiming the measure intrudes on their contractual rights, the House Insurance Committee voted 10-0 to send legislation to the Louisiana House floor that would protect pharmacists from agreements that include “gag orders.”

“This will ensure that pharmacists are permitted to inform their customers if the cash price for a prescription drug is less than the co-pay or deductible,” said state Rep. Robert Johnson, D-Marksville and sponsor of House Bill 436.

Andy Soileau, of Soileau’s Pharmacy in New Iberia, pointed to a claim invoice for a month’s supply of Sprintec 28. The birth control medication cost $11.65, but the customer’s required co-pay was $50.

“Gag clauses” in the contracts with the pharmacy benefits managers – large companies that administer prescription coverage – prohibit pharmacists from disclosing pricing reimbursement information.

But customers are noticing the dramatic rise in drug costs and they’re asking more questions. “We can’t answer them,” Soileau said.

“Our hands are tied when we’re trying to help people,” testified David Darce, of Thrifty Way Pharmacy in St. Martinville.

HB436 would allow pharmacists to disclose relevant information, such as how much they are reimbursed for the sale of the medication, effectiveness of the medication, and the availability of any alternative medications that are less expensive. The measure also would allow the state Department of Insurance to enforce the disclosures, giving pharmacists a measure of protection if sued for making the disclosures.

The contracts are with pharmacy benefit managers, which are companies that basically negotiate pharmaceutical prices with drug manufacturers, sell the drugs to local pharmacies, and then handle pharmacy claims for insurance companies.

Louisiana pharmacies are not the only ones chafing at the arrangements, said Insurance Commissioner Jim Donelon. Legislatures and insurance regulators around the country are pursuing similar bills.

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Just Tuesday, a bipartisan coalition of Arkansas lawmakers overwhelmingly approved similar legislation for that state.

Between 2016 and mid-March, at least seven other states have enacted laws prohibiting “gag clauses” in contracts that restrict pharmacists, according to the National Conference of State Legislatures.

As in other states, opponents point out that the pharmacy benefits managers keep prices lower by negotiating volume discounts.

HB436 meddles with agreements between private businesses that rely on proprietary information best kept private, said Leanne Gassaway, senior vice president for state affairs for American Health Insurance Plans, based in Washington, D.C. AHIP is a national trade association for health insurers. Pharmaceuticals account for about 22 percent of the cost of insurance premiums.

“The real issue is that drug prices are out of control,” Gassaway said. “That’s what we ought to be working toward.”

Allowing public disclosures of some of the data, particularly reimbursements, would expose information that competitors could exploit, said Melodie Shrader, senior director of state affairs for the Pharmaceutical Care Management Association, based in Washington, D.C. A national trade association, PCMA represents pharmacy benefit managers.

She added that both sides agree that consumers should pay less. The difference is how that goal is achieved. “We’re arguing about words,” Shrader said.

Some insurance committee members moved to postpone a vote on the legislation to allow time for both sides to agree on wording or perhaps hear the measure along with Senate Bill 241, a similar measure that the Senate approved Monday on a vote of 37-0.

Committee co-chairman Rep. Major Thibaut, D-New Roads, said that delay would only work to keep the legislation from getting through the House and the Senate in time to make it to the governor’s desk.

“The opposition knows the session is short,” Insurance Commissioner Donelon said, urging the committee to vote. “Keep the pressure on.”

Follow Mark Ballard on Twitter, @MarkBallardCnb.