levinson

With healthcare having topped voters’ priorities this election year, Q4 2018 feels like a whirlwind in the area of drug pricing.

First, there’s the Trump administration’s proposed Medicare Part B demonstration that would set physician-administered drug prices according to prices paid overseas. Then there are the proposals for direct-to-consumer prescription drug ads to display list prices.

These bids are specific demands for incremental transparency in discrete, well-defined segments of the healthcare ecosystem.

The end of the pharmacy gag rule is another such bid. But this one is different. It’s law. On October 10, President Donald Trump signed legislation that invalidated insurer or prescription benefit managers’ contractual restrictions that had prevented pharmacists from telling consumers their prescription medication might be cheaper if purchased out of pocket instead of through insurance.

States had already been taking similar action. From 2016 to August 2018, at least 26 states enacted laws prohibiting “gag clauses” in contracts that restricted pharmacists from disclosing a lower cash purchase price, according to the National Conference of State Legislatures.

So now, if a consumer asks if paying off-plan would cost less, pharmacists can tell them (though they are not required to proactively share on- or off-plan prices).

Will banning the gag rule alone make a dent in how consumers experience healthcare? Most likely, no. Gag clauses were already falling by the wayside.

What continues to be lost in various healthcare proposals is that transparency loses its efficacy when applied piecemeal.

With greater transparency of the cost and sale price of a drug must also come greater transparency of the inputs, ecosystem, and risk investment on which drug development relies.

Lauren Levinson is an SVP at Brodeur Partners.