Forget about Secrets: Congress Bans Pharmacist 'Gag Orders' On Drug Prices


For years, most pharmacists couldn’t give customers a clue a good easy way to save money on prescription medications. However the restraints are coming off.

When the cash price for a prescription is under what you would pay making use of your insurance policy, pharmacists will no longer need to keep that a secret.

President Mr . trump was scheduled to sign two bills Wednesday that ban “gag order” clauses in contracts between pharmacies and insurance companies or pharmacy benefit managers – those firms that negotiate prices for employers and insurers with drugstores and drugmakers. Such provisions prohibit pharmacists from telling customers when they can save money by paying the pharmacy’s lower cash price rather than the price negotiated by their insurance policy.

The bills Body for Medicare and Medicare Advantage beneficiaries and another for commercial employer-based and individual policies- were passed by Congress in nearly unanimous votes recently.

“Americans should be aware of lowest drug price at their pharmacy, but ‘gag clauses’ stop your pharmacist from suggesting!” Trump wrote on Twitter three weeks ago, shortly before the Senate voted around the bills. “I support legislation that will remove gag clauses.” The modification was among the proposals included in Trump’s blueprint to cut prescription medication prices issued in May.

Ronna Hauser, vice president of payment policy and regulatory affairs at the National Community Pharmacists Association, said many people in her group “say a pharmacy benefit manager will give them a call having a warning if they're telling patients it’s less expensive” without being insured. She said pharmacists might be fined for violating their contracts as well as dropped from insurance networks.

According to analyze published in JAMA in March, people with Medicare Part D drug insurance overpaid for prescriptions by $135 million in 2021. Copayments in those plans were higher than the money price for pretty much 1 in 4 drugs purchased in 2021. For 12 from the 20 most often prescribed drugs, patients overpaid by more than 33 percent.

Yet some critics say eliminating gag orders doesn’t address the causes of high drug prices. “As a country, we’re spending about $450 billion on prescription drugs annually,” said Steven Knievel, who works on drug price issues for Public Citizen, a consumer advocacy group. The modest savings gained by paying the cash price “is far short of what must happen to actually provide the relief people need.”

After the president signs the legislation affecting commercial insurance contracts, gag order provisions will immediately be prohibited, said a spokesman for Sen. Susan Collins (R-Maine), who co-authored the balance. The bill affecting Medicare beneficiaries wouldn't take effect until Jan. 1, 2021.

But there’s a catch: Underneath the new legislation, pharmacists will not be necessary to tell patients concerning the lower cost option. When they don’t, it’s as much as the customer to ask.

The Pharmaceutical Care Management Association, a trade group representing pharmacy benefit managers, said gag orders are increasingly rare. The association supported the legislation. Some insurers also have said their contracts don’t include these provisions. Yet two members of Congress have encountered them at the pharmacy counter.

At a hearing on the gag order ban, Collins said she watched a few leave a Bangor, Maine, pharmacy without their prescription simply because they couldn’t pay the $111 copayment and also the pharmacist did not advise them about saving money by paying directly for that medicine. When she asked him how often that happens, he explained every day.

“Banning gag clauses will make it easier for more Americans to afford their prescription drugs because pharmacists will be able to proactively notify consumers if your less expensive option might be available,” she said a week ago.

When Rep. Debbie Dingell (D-Mich.) visited a Michigan pharmacy to get a prescription recently, she was told it would cost $1,300. “After you peeled me off the ceiling, I called the doctor and screamed and spoke with the pharmacist,” she recalled throughout a hearing recently. “I’m much more aggressive than many in asking them questions,” she admitted, and ended up saving $1,260 after she learned she could get a similar drug for $40.

While the legislation removes gag orders, it doesn’t address how patients who pay the cash price outside their insurance plan can use that expense toward meeting their policy’s deductible.

But for Medicare beneficiaries there's a little-known rule – not based in the “Medicare & You” handbook or on its website -that helps people with Medicare Part D or Medicare Advantage coverage. When they pay the lower cash price for a covered drug at a pharmacy that participates within their insurance policy after which submit the proper documentation to their plan, insurers must count it toward patients' out-of-pocket expenses.

The total of those expenses are essential because that amount affects the drug coverage gap commonly called the “doughnut hole.” (This season, the gap begins after the plan and beneficiary spend $3,750 and ends once the beneficiary has spent a total of $5,000.)

And beneficiaries don’t have to hold back until the gag order ban takes effect in two years.

The Medicare rule also states that if a senior asks in regards to a lower price for a prescription, the pharmacist can answer.

Rep. Buddy Carter (R-Ga.), a pharmacist who sponsored the Medicare gag order bill, said he wasn't surprised at the bipartisan support for the legislation. “High prescription drug costs affect everyone,” he explained.