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Legislation to Regulate Pharmacy Benefit Managers Would Make Treatments More Affordable for Patients.

By Rolf Benirschke

June 26, 2018

Creating a patient-centered non-profit organization was not at the forefront of my life plan during my ten-year National Football League career with the San Diego Chargers. But all of that changed when I was diagnosed with ulcerative colitis in my second season and then became infected with the Hepatitis C virus from blood transfusions during one of the four major abdominal surgeries that would be required over the next four years.

Ulcerative colitis is a chronic, inflammatory bowel disease that causes inflammation in the digestive tract. Hepatitis C is a viral infection that causes liver inflammation that sometimes leads to serious liver disease and damage. After diagnosis and treatment, I founded Grateful Patient, both because of my own humbling experience as a patient receiving extraordinary care and access to innovative medication options, and the recognition that many other patients were encountering barriers to care including unaffordable medication copay costs. Unfortunately, many Californians are unknowingly overpaying for their prescription drugs at the pharmacy because of a complex system designed to keep them in the dark.

Pharmacy benefit managers (PBMs) are little-known third-party administrators hired to assist insurers and employers in managing prescription drug benefit programs of health insurance plan for individuals. Theirrole is to negotiate the amount patients pay for their prescriptions. Unfortunately, there are no regulations on these middlemen to ensure that they are getting the best price for consumers and many common practices of PBMs indicate that the exact opposite is happening.

Some PBMS have inserted ‘gag clauses’ into their contracts to prevent pharmacists from telling customers when their medications could be purchased cheaper out-of-pocket than through their insurance. This could mean that a customer with a $20 co-pay that is purchasing a $5 prescription could save $15 each time they visit the pharmacy. Instead, PBMs are profiting from the overpayment difference, known as a ‘clawback.’

According to a recent University of Southern California study, customers overpay for their prescriptions 23 percent of the time, with an average overpayment of $7.69 on each transaction. During the six-month study, the overpayment totaled $135 million!

Fortunately, there are two pieces of common-sense legislation before the legislature that could help rein in these practices and ease prescription costs for California. Assembly Bill 315 would prohibit the gag clauses that prevent pharmacists from telling customers when it would be cheaper to pay out of pocket rather than going through their insurance. Assembly Bill 2863 addresses clawbacks and would prohibit PBMs from requiring pharmacies to charge patients inflated co-pays, which are sometimes greater than the actual cost of medications.

On behalf of Grateful Patient and the thousands of patients that I have been fortunate to meet, I urge policymakers to support AB 315 and AB 2863. Every bit of health care cost savings helps patients and their family afford treatments – it should be patients who get to see those savings, not PBMs.