President Trump Signs Bills to Lower Cost of Drugs

This afternoon, President Trump signed two bipartisan bills into law today intended to lower patients’ prescription costs: Know the Lowest Price Act of 2018 (S. 2553) and the Patient Right to Know Drug Prices Act (S. 2554). The bills prohibit health insurers and pharmacy benefit managers ("PBMs") from including so-called “gag clauses” in contracts with pharmacies.

The clauses ban pharmacists from notifying patients when they could pay less for medicines without using their health insurance than they would for their copayment. The new laws are projected reduce patient out-of-pocket spending and increase drug transparency. It was important to eliminate pharmacy gag clauses that prevent pharmacists from informing consumers of lower priced alternatives. In a competitive market, we would expect providers would have the ability to guide consumers to the best products at the lowest cost.

The Coalition to Protect Patient Choice made these points in our comments that we filed in July along with Consumers Union, Consumer Action and US PIRG in response to the HHS RFI on drug pricing. [read here]

As consumers face rising prescription drug costs, the laws prohibiting PBMs from forcing these prohibitions on pharmacists are a strong step in the right direction. Pharmacists need the freedom to advise their patients how to get the care they need. This includes guidance about lower cost alternatives or that the cash price for a prescription drug may be less expensive than their insurance co-pay. The clear purpose of the gag clause was to conceal the costs of prescription drugs from consumers, causing consumers to pay more, with the only clear benefit going to the PBM’s bottom line. Unfortunately, most consumers are not provided with a full set of information when purchasing a prescription drug. It was not obvious to a consumer that sometimes the cheapest way to buy prescription drugs at the pharmacy is to pay cash rather than to use her insurance plan. When those situations arise, a pharmacist should be allowed to advise their patients how to make informed decisions to save money.

Consumers have a right to know the costs of their prescription drugs. Gag-clauses are unfair and harmful to consumers. The elimination of gag-clauses is an important step towards increasing drug pricing transparency for consumers.