Senate Passes Bill to Prohibit Gag Clauses in Pharmacies

The US Senate has passed S. 2554, the Patient Right to Know Drug Prices Act, which was a bill introduced by Sen. Collins (R-ME) that would prohibit insurers and prescription benefit managers from using gag clauses by health insurers and pharmacy benefit managers, a practice which some claim that conceals lower prescription drug prices from some patients at the pharmacy. The bill, which was cosponsored by a bipartisan group of 24 Senators, now heads to the House of Representatives for consideration.

Pharmacy gag clauses forbid pharmacists from proactively telling consumers if their prescription would cost less if they paid for it out-of-pocket rather than using their insurance plan. Pharmacists who disobey these clauses face penalties. The Patient Right to Know Drug Prices Act would prohibit an insurer or pharmacy benefit manager 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. This bill would apply to plans offered through exchanges and by private employers.

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.

In a statement reacting to the vote, NCPA CEO B. Douglas Hoey, Pharmacist, MBA noted: “Empowering pharmacists to discuss out-of-pocket payment alternatives with patients on private insurance, as S. 2554 does, may reveal lower-cost options. Helping patients know their alternatives increases the chances they can afford their medications—and that they will take them as they should and refill them when necessary.

Just as S. 2553, the Know the Lowest Price Act, passed by the Senate last week, prohibits so-called ‘gag clauses’ in Medicare Part D plans, the legislation passed this week applies that prohibition to plans offered through the exchanges and by private employers.

Legislation prohibiting gag clauses in Medicare and private plans passed the House of Representatives Energy and Commerce Committee last Thursday and could be voted on by the full House as early as next week. Following House passage, the 2 chambers will reconcile these pieces of legislation to vote on its ultimate passage.

Additionally, the Senate last night also passed the Opioid Crisis Response Act, a package of bills aimed at combating the ongoing opioid epidemic. The package includes NCPA-supported provisions to help pharmacists be able to care for patients, and follows passage in the House of Representatives of its own opioid package earlier this year. The next step will likely be a conference committee of policymakers from the House and the Senate tasked with reconciling the differences between the 2 bills.