Senate Votes 98-2 to Ban Pharmacist Gag Clauses

The Senate late Monday passed a bill that would put an end to gag clauses that bar pharmacists from telling consumers when it would cost less to pay cash for a prescription than to shell out the copayment under their health plan.

The bill, part of President Donald Trump’s blueprint for reining in drug prices, is not a panacea for high costs, but was seen as small step in the right direction by advocates who supported its passage, including the Campaign for Sustainable Rx Pricing.

Besides consumer groups, community pharmacists support the Patient Right to Know Drug Prices Act (S.2554), which was sponsored by Senators Claire McCaskill, D-Missouri; Debbie Stabenow, D-Michigan; and Susan Collins, R-Maine. The bill passed 98-2, with only Senators Rand Paul, R-Kentucky, and Mike Lee, R-Utah, voting no. Lee only wanted to lift the gag rule for self-insured plans.

The bill now moves to the House of Representatives.

The National Community Pharmacists Association (NCPA) has said that gag clauses interfere in their relationships with their patients.

“As trusted healthcare providers whose aim is to get and keep patients well, pharmacists should be free to properly advise their patients about medication costs. That cost—even an insurance co-pay—can often be an impediment to patient access and adherence,” B. Douglas Hoey, chief executive officer of the NCPA, said in a statement.

He added that the bill will empower pharmacists to discuss out-of-pocket payment alternatives with patients, which can result in lower costs. These discussions between pharmacists and patients also increase the chances patients can afford their medications and will take them as prescribed.

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“NCPA cheers the Senate’s passage of S. 2554, the Patient Right to Know Drug Prices Act, legislation that will prohibit so-called ‘gag clauses’ in private health plans. 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 last night applies that prohibition to plans offered through the exchanges and by private employers," Hoey said.

Earlier this month, a NCPA board member testified about the effect that pharmacy benefit manager (PBM) gag clauses had on his community pharmacy in an appearance before the House Energy and Commerce Subcommittee on Health, recalling how his pharmacy was given a verbal warning by a PBM for telling a customer that a medication could be obtained less expensively if paid for off insurance.

“The PBM stated we were in violation of our contract for disparaging the plan when we discussed the cost of a drug off insurance,” said Hugh M. Chancy. “We were told that if our pharmacy were to do so again, there would be consequences, including exclusion from PBM networks."

In 2016, 59% of community pharmacists surveyed by the NCPA said they had encountered such restrictions 10 times in the past month.

In a statement, McCaskill said that in 2013, Americans paid $135 million more than necessary because of gag clauses. In her floor speech, she said it was time to “scoot all the ideology out of this place” and do what was necessary to save consumers money on their drugs.

Nirmeen Fahmy, a spokeswoman for Stabenow, told The American Journal of Managed Care^® in an email that community pharmacists in Michigan had brought the problem to the senator’s attention.

“We are getting so much closer to prohibiting the outrageous use of pharmacy gag clauses preventing customers’ right to know the lowest price for the medication they need,” Stabenow said in a statement. “Patients should have the right to know if they can save money by paying cash out-of-pocket rather than using their insurance and their pharmacists should have the right to tell them.”

Stabenow also referenced last week’s passage of the bill to prohibit gag clauses in Medicare Part D.

America’s Health Insurance Plans (AHIP) has previously taken a position that consumers “should be able to get their prescriptions at the lowest price available,” according to a statement provided by a spokeswoman. Lifting the pharmacy gag rule “doesn’t solve the problem of patients being unable to afford their medications, because drug prices are simply too high.”

AHIP said it supports additional steps to encourage competition, increase transparency, and examine why prices rise every year.

While removing pharmacy gag clauses are not a core issue for the Academy of Managed Care Pharmacy, CEO Susan A. Cantrell, RPh, CAE, said in a statement that the group supports giving patients access to information, so they can be well-informed participants in the decision-making process.

"Access to information on treatment, quality and cost is crucial for patients and providers in order to use health care resources wisely,” Cantrell said.