Maryland Group Challenges Pharmacist Gag Clause on Drug Costs

The Maryland Citizens' Health Initiative Education Fund recently announced that state legislators are pursuing the elimination of a gag clause that prevents pharmacists from alerting patients in instances when they can pay less for a prescription drug by not using insurance, according to a press release.

If the legislation passes, pharmacies would be able to bypass a controversial rule that is often included in contracts with pharmacy benefit managers (PBMs). Thus far, Connecticut, Maine, Louisiana, North Dakota, and Georgia have all banned this practice, according to the release.

“It is this problem of pharmacists being prohibited from telling people that the price is lower from out-of-pocket insurance price,” said Vinny DeMarco, president of Maryland Citizens’ Health Initiative.

The advocacy group said that the problem with the gag clause is that a patient may be able to pay much less for a drug without using insurance. Due to contract restrictions, pharmacists are unable to inform their patient about this option, according to the release.

Currently, it is unclear which drugs are affected by this rule due to non-transparent PBMs, according to the release.

“We don’t know because these documents aren’t public,” DeMarco said.

The group said that Maryland State Delegate Eric Bromwell (D-Baltimore County) is working to pass the legislation. Previously, Bromwell passed a law that allows the state attorney general to block price gouging by pharmaceutical manufacturers.

The novel legislation follows a bill that was recently implemented in Connecticut that prohibits PBMs from including gag clauses in contracts, according to the advocacy group.

Although federal legislation has targeted high drug costs, it has yet to tackle the issue of gag clauses, which, if eliminated, may help lower out-of-pocket costs for patients, according to the release.

Numerous studies have suggested that high costs can result in medication nonadherence and lead to patients abandoning their prescriptions. A recent analysis showed that just 10% of patients did not pick up their prescription for oral cancer drugs when their co-payment was less than $10, but the abandonment rate jumped to 32% when patients had to pay between $100 and $500.

Several lawsuits have been brought against large chain pharmacies alleging that the companies participated in a scheme with PBMs to inflate the cost of generic drugs for patients using insurance. The plaintiffs in these lawsuits said that the pharmacy did not inform them they could pay less without insurance.

Lawsuits and high drug costs may be mitigated with the elimination of gag clauses in PBM contracts.