PBM ‘gag clauses’ under fire in newly introduced Senate bills

Allowing pharmacists to tell patients about drug prices seen as tool to fight rising costs

A bipartisan group of U.S. senators introduced legislation on Wednesday, March 14, that would prohibit PBMs from imposing “gag clauses” in pharmacy contracts that bar pharmacists from telling patients when the out-of-pocket cost of drugs is less than the copay through their insurance. If pharmacists violate the gag clauses, PBMs may end the contracts or otherwise impose penalties—a practice widely criticized for inhibiting price transparency and contributing to rising health care costs for patients. APhA supports the bills.

“APhA believes this legislation will empower pharmacists to increase patients’ access to information and affordable and cost-effective medications,” said APhA CEO Tom Menighan, BSPharm, MBA, ScD. “We greatly appreciate the sponsors’ taking action to help our patients.”

Sens. Debbie Stabenow (D-MI), Susan Collins (R-ME), Ron Wyden (D-OR), and Bill Cassidy (R-LA) introduced the Know the Lowest Price Act (S. 2553), which would prohibit Part D plan sponsors’ and contracted PBMs’ restrictions barring pharmacies from informing individuals on drug prices. The bill was written after discussions with pharmacists, who expressed frustration with their inability to help patients struggling with high copayments.

This group worked in tandem with several senators from the Senate Health, Education, Labor, and Pensions (HELP) Committee to introduce the Patient Right to Know Drug Prices Act (S. 2554). Introduced by Sens. Collins, Claire McCaskill (D-MO), John Barrasso (R-WY), and Stabenow, this bill would prohibit gag clauses in Health Insurance Marketplace plans as well as Employee Retirement and Income Security Act (ERISA) plans—employee benefit plans offered by private-sector employers.

States across the nation have been tackling so-called gag clauses through their legislatures, including Arizona, Florida, Mississippi, Missouri, New Hampshire, New York, Pennsylvania, South Carolina, Virginia, and Washington.