Senate unanimously approves ban on pharmacy gag rules
The Know the Lowest Price act would only apply to Medicare Part D and Medicare Advantage plans; PBMs and insurers will be free to impose gag clauses for non-Medicare health plans.
In a rare display of bipartisan spirit, the U.S. Senate voted unanimously on Tuesday to bar Medicare insurers from putting in place “gag rules” that prevent pharmacists from informing patients that the medication they’re paying for would actually be cheaper if they purchased it out-of-pocket.
The Know the Lowest Price Act was introduced in March by Sen. Debbie Stabenow, D-Mich., and had 13 co-sponsors, seven of them Republicans. The bill still need to be approved by the House of Representatives and be signed by the president.
Related: Pharmacists blame pharmacy benefit managers for driving up drug costs
“Passing this bill and eliminating gag clauses gives patients more power to lower their healthcare costs,” said Sen. Bill Cassidy, R-La., in a statement. “It makes prices transparent so patients can save money with less expensive prescriptions.”
The bill will only end such provisions for Medicare Part D and Medicare Advantage plans. Pharmacy benefit managers and insurers will be free to impose them on pharmacies for non-Medicare health plans.
Gag orders are generally put in place at the behest of pharmacy benefit managers that insurance companies hire to manage their prescription drug benefit. The problem, of course, is that somebody has to pay for the PBM’s involvement. Oftentimes, that’s the patient.
As a result, the copay or coinsurance that the patient is paying for a medication through their health plan is occasionally higher than what they would pay if they simply paid cash for the drug. However, many PBMs impose contracts on pharmacists that prohibit them from informing patients that they could save money by going around their insurer.
In February, Mark Merritt, the president and chief executive of the Pharmaceutical Care Management Association, an association for PBMs, said that gag orders were not common and that the organization did not endorse their use.
“It’s not condoned by the industry. We don’t defend it. It has occurred on rare occasions, but it’s an outlier practice that we oppose,” he told the New York Times.
A number of states have taken action to crack down on gag orders. Connecticut and North Dakota have banned the practice entirely. North Carolina passed a law stating that pharmacists have the right to such such information with patients, while a new law in Georgia states that pharmacists cannot be “penalized” for ignoring a gag clause.
An opioid treatment bill is another piece of legislation that has the potential to win bipartisan support. However, Democrats are demanding that a last-minute provision added by Sen. Jon Cornyn, R-Tex., be removed.
The provision directs the Attorney General to offer grants to addiction treatment organizations, but Democrats say that the criteria listed in the amendment makes it clear that the only organization eligible for the grants would be the Addiction Policy Forum, a group with close ties to PhRMA.
However, Democratic Leader Chuck Schumer, D-N.Y., indicated that he did not believe the dispute would doom the legislation.
“We’re making very good progress,” he said Wednesday, according to the Hill. “I have to give Sen. McConnell credit. This is something we’re working very well together on.”