Senate OKs Wyden bill to lift pharmacists’ ‘gag rule’

Sen. Ron Wyden announced Wednesday the Senate unanimously passed his bill that would crack down on outrageous gag clauses blocking pharmacists from telling customers they could pay less for their prescription if they pay out of pocket.

“Pharma middlemen have been taking advantage of America’s broken drug pricing system for too long – banning pharmacists from telling customers the lowest available price for their medication is another flagrant example,” Wyden said in a news release.

“I’m pleased that the Senate was able to say loud and clear that this practice has to stop. The House should immediately pass this bipartisan bill and the president should sign it into law before any more seniors and families get ripped off.”

Many customers don’t know they could pay less for their prescription if they pay out of pocket rather than using their insurance at the pharmacy counter. That’s because many pharmacists are prohibited from telling their customers that a prescription to treat diabetes or high blood pressure may cost only $8 out of pocket instead of $20 through insurance coverage.

One 2018 report found that customers overpaid for prescription drugs at the pharmacy counter 23 percent of the time. And many pharmacists are frustrated that they can’t help their customers save money.

The bipartisan Know the Lowest Price Act cracks down on this practice by prohibiting Medicare Part D Plans from restricting a pharmacy’s ability to provide drug price information when there is a difference between the cost of the drug under the plan and the cost of the drug when bought without insurance.

Other co-sponsors of the Know the Lowest Price Act are U.S. Senators Debbie Stabenow (D-MI), Susan Collins (R-ME), Bill Cassidy (R-LA), Claire McCaskill (D-MO), John Barrasso (R-WY), Rand Paul (R-KY), Sherrod Brown (D-OH), Rob Portman (R-OH), Joe Donnelly (D-IN), Dean Heller (R-NV), Bob Menendez (D-NJ), Deb Fischer (R-NE), and Chris Van Hollen (D-MD).

Wyden has long said the entire drug supply chain must be addressed, recently releasing a report outlining the supply chain’s tangled webs that leads to higher costs for consumers and taxpayers.

He has also introduced bills that ensure drug middlemen show how much value they are actually passing along to consumers and that call on pharmaceutical companies to justify massive price hikes.

The Know the Lowest Price Act now goes to the House for consideration.

Meanwhile, continuing his efforts to reduce drug prices and increase control for patients in Oregon and across the country, Repr. Greg Walden, R-Ore., on Wednesday highlighted bipartisan legislation that would make important progress toward that goal.

Walden, who chairs the Energy and Commerce Committee, said in a news release his committee is moving forward with a bill that would prohibit the use of so-called “gag clauses,” which limit the disclosure of lower pricing options available to patients purchasing prescription medications.

“The Energy and Commerce Committee is working on legislation that would ban ‘gag clauses’,” said Walden. “This was first brought to my attention from a pharmacist from Grants Pass, Michele. She told me that as a pharmacist she was precluded — under certain insurance contracts — from telling consumers that if they simply paid for their drugs out of pocket, it would actually be cheaper than paying through their insurance plan and the deductible.

“These gag clauses have no business in an open and free marketplace, and the Committee on Energy and Commerce, which I lead, will be moving legislation forward to get rid of them,” the congressman said.

“Gag clauses are an unnecessary restriction on our ability as pharmacists to communicate with our patients,” said Michele Belcher, owner and pharmacist at Grants Pass Pharmacy and board member of the National Community Pharmacists Association. “I once received a cease and desist letter for trying to help a child with a terminal disease access his medication. That should never happen. I applaud Representative Walden for taking this issue on.”

It has been widely reported that some health insurance contracts prevent pharmacists from informing patients when the cash price for their prescription costs less than their insurance cost-sharing arrangement unless the individual directly asks. As a result, consumers may be paying more for their prescriptions than is warranted.

The legislation aims to ban group health plans offered by employers and individual health insurance plans — as well as Medicare Advantage and Medicare Part D Plans — from restricting a pharmacy’s ability to inform a customer about the lower cost, out-of-pocket price for their prescription.

Walden’s Energy and Commerce Committee today held a hearing to examine the legislation before the committee’s health panel. During the hearing, Walden further highlighted the bill’s potential to give patients more information about their pricing options for prescription medications.

“Many patients who are struggling to afford costly prescription drug prices may not know that paying for their medications with cash can sometimes be cheaper than using their health insurance. What’s worse is some contracts prohibit pharmacists from telling their customers when this is the case,” said Walden during the hearing. “Banning these so-called ‘gag clauses’ has gained tremendous bipartisan support, with bills in both the Senate Finance and Senate HELP committees advancing without objection.”

For additional information on the legislation, including a background memo and archived webcast from Wednesday’s hearing, click here.