Lawmakers Unanimously Approve Bills to Prohibit 'Gag Clauses' for Pharmacists

A federal bill that would lift ‘gag clauses’ prohibiting pharmacists from sharing prescription drug prices with customers was unanimously passed by the House of Representatives Tuesday. House lawmakers also unanimously passed a bill that would give Medicare patients further access to drug prices.¹

Both bills previously passed the Senate, unanimously, and await President Trump’s signature. According to lawmakers, the bipartisan bills are expected to be signed into law.¹

The president also expressed support for the initiative in a Tweet posted prior to the Senate’s votes.

Americans deserve to know the lowest drug price at their pharmacy, but “gag clauses” prevent your pharmacist from telling you! I support legislation that will remove gag clauses and urge the Senate to act. #AmericanPatientsFirst

— Donald J. Trump (@realDonaldTrump) September 17, 2018

Sen. Susan Collins (R-ME), an author on both bills, said in a prepared statement that ‘gag clauses’ inserted into contracts by health insurers and pharmacy benefit managers (PBMs) conceal lower prescription drug prices from patients by prohibiting pharmacists from sharing the information. Although health insurance plans are intended to save consumers money, she said, ‘gag clauses’ have the opposite effect.^1-2

"Who would think that using your debit card to buy your prescription drugs would be less expensive than using your insurance card? It’s counterintuitive,” Collins said, in the statement.^1-2 “Americans have the right to know which payment method provides the most savings when purchasing their prescription drugs.”

Prescriptions cost is a common barrier to adherence, according to a survey published in the Journal of the American Medical Association (JAMA). In turn, nonadherence is associated with increased use of medical services, as well as negative health outcomes.³

In a prepared statement, Sen. Claire McCaskill (D-MO), also an author on both bills, said the legislation offered a "commonsense fix" that would help citizens better afford their prescriptions.

“Nearly one in four Americans pay more for their prescriptions than they need to—and at a time when drug prices are skyrocketing, and Missourians are struggling to pay for their prescriptions, that’s just unacceptable,” McCaskill said.²

The Patient Right to Know Drug Prices Act would prohibit insurers and PBMs from restricting a pharmacy’s ability to provide drug price information to a plan enrollee when there is a difference between the cost of the drug under the plan and the cost of the drug when purchased without insurance. Under current contracts with ‘gag clauses,’ pharmacists are prohibited from proactively sharing with customers if their prescription would cost less if they paid out-of-pocket, rather than utilizing an insurance plan. Pharmacists face significant penalties for disobeying these clauses.^1-2

In a prepared statement, Sen. Debbie Stabenow (D-MI), a co-sponsor of the Patient Right to Know Drug Prices Act and a sponsor of the Know the Lowest Price Act, said the bill’s passage was an important step toward lowering prescription drug prices that are skyrocketing. “It’s wrong that a person overpays for their medication simply because their pharmacist is not allowed to tell them they could pay a lower price with cash instead of insurance,” said Stabenow, in the statement.¹ “Thanks to a successful bipartisan effort, we’ve banned this outrageous practice once and for all.”

The Know the Lowest Price Act provides the same protection for individuals who are covered by Medicare Advantage and Medicare Part D plans.¹

In the study reported by JAMA, researchers recommended possible legislation targeting 'gag clauses, as well as overpayments, for lowering patient expenses.³

Overpayments at point-of-sale were common, according to the JAMA study. An analysis of study data found 23% of all prescriptions and 28% of generic prescriptions were affected. Study authors wrote that the insurer or PBM retains the difference when patients are overcharged.^1,3 The researchers also noted that increased cost may exacerbate a patient’s inability to adhere to a prescription and elevate the risk of negative outcomes.³

According to a statement from Collins' office, several health care organizations supported the legislation including the National Community Pharmacists Association (NCPA), the American Medical Association, the Alliance for Transparent and Affordable Prescriptions, the ERISA Industry Committee, the Pharmaceutical Care Management Association, and America’s Health Insurance Plans.

Reference

• Bipartisan Bills to Prohibit “Gag Clauses” That Cause Consumers to Overpay for Prescription Drugs Head to President’s Desk [news release]. Washington, DC; September 25, 2018; Senator Susan Collins website. https://www.collins.senate.gov/newsroom/bipartisan-bills-prohibit-%E2%80%9Cgag-clauses%E2%80%9D-cause-consumers-overpay-prescription-drugs-head. Accessed September 26, 2018.
• Bipartisan Bill to Prohibit “Gag Clauses” That Can Cause Consumers to Overpay for Prescriptions Passes Senate [news release]. Washington, DC; September 17, 2018; Senator Susan Collins website. https://www.collins.senate.gov/newsroom/bipartisan-bill-prohibit-%E2%80%9Cgag-clauses%E2%80%9D-can-cause-consumers-overpay-prescriptions-passes. Accessed September 26, 2018.
• Van Nuys K. Joyce G. Ribero R. Goldman D. Frequency and Magnitude of Co-payments Exceeding Prescription Drug Costs. JAMA. 2018;319(10):1045-1047. doi:10.1001/jama.2018.0102. Accessed September 26, 2018.