The US Senate has unanimously passed a bill banning Medicare insurers from using “gag clauses” to stop pharmacies from telling patients how to obtain cheaper drugs.
The “Know the Lowest Price Act” intends to let Medicare customers know if their prescriptions would be cheaper if bought “out of pocket” as opposed to via insurance.
Under the current system, patients can end up paying more than triple for prescription drugs if they go through their insurance plan, due to the complex supply chain between pharmaceutical companies, health insurance companies and patients.
The new law is set to come into effect in January 2020, should it pass through the House of Representatives and win presidential assent and would explicitly apply to Medicare Part D, which covers prescription drugs, and Medicare Advantage, which provides managed healthcare based on a monthly fee.
The National Academy for State Health Policy, which tracks proposals that have been put forward by state legislatures in the US, lists a total of 90 bills across more than 30 states that call for the elimination of gag clauses, but as of yet no federal law against them exists.
“In states where gag clauses are in place, unless a patient specifically asked, a pharmacist could not volunteer the information that a given drug might be cheaper if the patient were to acquire it without going through his or her insurance company,” Ana Santos Rutschman of the Center for Health Law Studies at Saint Louis University School of Law told PLN. “What the bill does is remove this prohibition, so that pharmacists can freely provide that information.
Santos Rutschman said that, in some cases, patients pay up to 25% more for a drug because of gag clauses and that the new law will have the effect of lowering certain prices as well as increasing drug price transparency.
“Passing this bill and eliminating gag clauses gives patients more power to lower their health care costs,” said Louisiana senator Bill Cassidy, who helped to introduce the bill. “It makes prices transparent so patients can save money with less expensive prescriptions.”
The Trump Administration is calling for Congress to do away with gag clauses and introduce other legislation to reduce medication prices. Another bill introduced into Congress in June, entitled the “Patient Right to Know Drug Prices Act”, aims to provide similar protections for those with private health insurance.