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Government & Politics

State Regulators Forbid 'Gag Orders' on Pharmacy Prices

Photo of pills
Prescription can be more expensive even with insurance coverage than paying out-of-pocket.

Ohioans who go to the pharmacy to pick up prescriptions sometimes pay more out of pocket with their insurance card than they would if they didn’t have coverage. However, state regulators are trying to ensure Ohioans pay the least possible. 

The Ohio Department of Insurance’s Jillian Froment says sometimes pharmacists don’t disclose potential cost savings because of what’s often called a “gag order.”

“Contracts they have with pharmacy benefit managers prevent them from letting a consumer know that there is a cash option available that would be less expensive than using their insurance card to cover their pharmacy benefit.”

Insurance companies often require the customer to cover a deductible or a copay that can amount to more than the consumer would pay without insurance.

Froment says state regulators are now ordering insurers and pharmacy benefit managers, who act as middlemen in the process, to tell Ohioans if they could save money by opting for a lower-priced drug and paying cash. Some Ohio lawmakers are also pushing for a bill to allow the state auditor to review contracts between pharmacies and benefit managers.