The explosion in generic drugs — now at about a 90 percent dispensing rate — came in the wake of the 1984 Hatch-Waxman Act, Bishop explains, which was intended to encourage the manufacture of generic drugs.
“It literally went from 20 percent or so in the 1980s,” Bishop said.
But the language in some contracts prevents pharmacists from mentioning these alternatives. “Except for generics, pharmacists are not allowed to consult on other available products,” Bishop said.
Sometimes called “gag rules,” contracts between pharmacists and pharmacy benefit managers — who work on behalf of your company’s health plan — use boilerplate language to prevent a pharmacist discussing lower-cost alternatives.
The benefit manager creates the formulary of drugs on the health plan, usually in three cost tiers. The conflict arises when the benefit manager gets a rebate on brand-name drugs, said Bishop.