Connecticut Governor Dannel Malloy has just signed into law Public Act 17-241, a bill that forbids certain contract provisions between Pharmacy Benefit Managers (PBMs) and pharmacies that limit price information that can be provided to consumers. The Act is designed to curtail what legislators termed “secret price gouging” by PBMs. 

PBMs, as the administrators of prescription drug plans for many health insurers, set the co-pay for drugs on their approved formularies. Also included in many PBM contracts are so-called “gag clauses” that prohibit pharmacists from sharing price information with their customers, particularly when that information relates to lower cost options, such as those instances where it is actually cheaper for the consumer to pay out-of-pocket than through insurance when the co-pay is higher than the actual cost of the drug. PA 17-241 outlaws these “gag clauses,” making them void and unenforceable. Violations will constitute an unfair trade practice under Connecticut law. 

The “gag clause” restrictions on PBM contracts are effective on and after January 1, 2018. 

The full text of PA 17-241 is available HERE