Senate Votes to Ban Pharmacy Gag Clauses

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.

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.

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