Missouri bill will protect customers from overpaying on prescriptions

Posted at 4:56 PM, May 24, 2018
and last updated 2018-05-24 19:26:38-04

KANSAS CITY, Mo. -- A new piece of legislation is putting an end to business practices that cause customers to overspend on their prescriptions. 

On Wednesday, lawmakers approved Missouri HB1542, which prevents pharmacy benefits managers from receiving clawbacks. 

Pharmacy benefits managers negotiate drug prices for insurance companies. The intention is to help insurance companies get certain drugs for cheaper rates. 

However, a person's co-pay can oftentimes be more expensive than the drug itself.

In these cases, people wind up paying more because no one tells them the drugs would be cheaper if bought without using insurance.

Pharmacy benefits managers place pharmacists under gag clauses that prevent them from telling customers there's a cheaper option for their drugs. 

Instead, the pharmacy benefits managers clean up on the deal by pocketing the money that's leftover after paying the pharmacy for the drug in what's known as a clawback. 

For example, if a drug costs $20, but the co-pay is $50, the pharmacy benefits manager would give the pharmacist the $20 for the cost of the drug, then pocket the remaining $30.

It's been legal for years.

However, Missouri, along with several other states, has enacted legislation to prevent both clawbacks and the gag clauses.

Kansas introduced similar legislation recently. 

While Kansas no longer allows pharmacy benefits managers to prevent pharmacists from informing a customer that their drug could be cheaper without insurance, Kansas did not put a stop to the pharmacy benefits managers when it comes to receiving clawbacks.