Virginia lawmakers are taking aim at a hidden scam driving up prescription drug prices. It’s called a ‘copay clawback’ and 8News first exposed this little-known secret back in December.
“The bill before you is a pro-consumer, pro-transparency bill that will help patients and our brick and mortar pharmacists back in our districts,” says Delegate Todd Pillion from Virginia’s 4th District.
Pillion has introduced legislation to close a drug price loophole. His bill would give pharmacists the freedom to tell patients about the cheapest way to pay for their prescriptions. Ideally, it put money back in the pockets of patients.
“Mr. Chairman, I would like to thank WRIC they brought attention to this,” Pillion told a House Committee.
8News had uncovered some pharmacists had been sworn to secrecy.
“There’s a gag order in the contracts with the PBM’s,” Pillion explained.
Our 8News investigation exposed PBM’s, or ‘pharmacy benefit managers,’ are a sort of middle-man between insurers and the pharmacy. Sometimes they charge a copay that exceeds the cash price. That middle-man then pockets, or ‘clawbacks,’ the profit.
8News learned your pharmacist is often threatened or prohibited from telling you, it would just be cheaper to pay in cash.
“There is a language in the contract that implies if the pharmacist shares information with the consumer, certain information with the consumer, the insurance plan can terminate the pharmacist contract,” Douglas Hoey, CEO of the National Community of Pharmacists Association told 8News.
This copay clawback practice is the subject of several federal lawsuits across the country.
In one suit, the plaintiff Megan Schultz alleges she got ripped off. She claims she paid $165.68 for a generic drug with her insurance. However, if she paid in cash, it would have only cost $92.
“In essence, they have been generating $270 billion in revenue every year,” Delegate Todd Pillion said.
Pillion’s bill removes the gag order and prohibits PBM’s from penalizing pharmacists for sharing pricing information. It’s getting wide support from- pharmacists.
The bill passed through the House and now heads to the Senate for consideration.