Sep 14 2018
Americans know all too well the crippling costs of healthcare today. On top of the daily struggles of ordinary families to put food on the table, skyrocketing costs of prescription drugs are getting harder and harder to meet.
And pharmacist “gag rules” are only making it worse.
These contract clauses between pharmacies on one side and insurers and pharmacy benefit managers on the other, prevent pharmacists from telling customers they could save money on prescriptions by paying with cash instead of using insurance. Pharmacists are actually prohibited from helping their customers get the best price for their medications.
According to a recent study, about 23% of all drug claims in 2013 involved overpayments, amounting to more than $135 million.
And who pockets those extra dollars? The insurers or benefit managers – in other words, the pharma middlemen.
This is undoubtedly a problem. It is only further evidence of our broken drug pricing system unnecessarily hurting the American people.
And we can all agree that this problem must be fixed. What I believe we must consider, however, is how to best address the problem, who is best equipped to do so, and whether it has already been fixed.
Senator Collins recently introduced a bill which mandates that gag clauses be prohibited under all health insurance plans, including individual and group plans that are administered by states.
The federal government can and should prohibit gag clauses in the plans that it administers. But it cannot and should not intervene in plans that it does not.
Many states have already made great progress on this issue. 26 states have already passed laws banning gag rules, and another 11 states are currently in the process of trying to pass them.
And we ought to leave space for them to do so.
Some have suggested that this state action and increased attention to the cost of prescription drugs has more or less solved this problem and greatly limited the use of gag clauses already. It’s notable that the previously referenced study – the only data we have on this issue – looked at practices from five years ago. The states more directly witnessed this problem, and since then were able to nimbly and capably fix it.
However, even if gag clauses are still in use, we must recognize that it is not the role of the federal government to regulate entities under the jurisdiction of the states. However well-intentioned, when Congress oversteps its authority like this, we usually end up doing more harm than good.
This Monday Congress will vote on a bill that would ban gag rule contracts nationwide. This is a step too far. States are already solving this problem on their own. That is why I will offer an amendment that would narrow the scope of the legislation to its proper scope. Instead of the bill applying to all health plans, my amendment would limit its application to only self-insured group plans, which Congress previously exempted from state regulation. This would close a loophole where states are unable to reach to provide Americans additional transparency surrounding the cost of their prescription drugs.
While the overall goal of the underlying bill is laudable, we must remember that it is neither the role nor the duty of the federal government to regulate all aspects of commerce and Americans’ everyday lives.
The way to help ordinary Americans with high drug costs is not to further cede power to Washington. The federal government’s intervention in healthcare has already caused huge distortions in the market, for which Americans pay a steeper price every year.
If we truly want to protect the American people from abuses like gag rules, we should fight to preserve federalism and the vision of our Constitution – so that states are empowered to directly and efficiently protect their citizens from the injustices they face.