Trump Supports Legislation Banning Pharmacy Price ‘Gag Clauses’

September 17, 2018 Updated: September 17, 2018

President Donald Trump urged the Senate to pass a bill that would ban contracts that prohibit pharmacists from informing customers that paying with cash may cost them less than using their insurance plans.

Insurance companies sometimes write the so-called gag clauses into their contracts with pharmacies, preventing pharmacists from advising customers on low-cost routes for obtaining their prescribed medicine. While some states have banned the practice, there is no federal ban.

Senators were expected to vote on Sept. 17 on a measure that would ban the gag clauses.

“Americans deserve to know the lowest drug price at their pharmacy, but ‘gag clauses’ prevent your pharmacist from telling you! I support legislation that will remove gag clauses and urge the Senate to act,” Trump wrote on Twitter.

Americans overspent by an estimated $135 million in 2013 as a result of gag clauses, according to a recent study published in the Journal of the American Medical Association. The study reviewed 9.5 million insurance claims and found that in almost one in four cases, customers paid more for drugs using their insurance than they would have if they had used cash.

“Insurance is intended to save consumers money. Gag clauses in contracts that prohibit pharmacists from telling patients about the best prescription drug prices do the opposite,” Sen. Susan Collins (R-Maine) said in a statement. “Who would think that using your debit card to buy your prescription drugs would be less expensive than using your insurance card? It’s counterintuitive.”

The Patient Right to Know Drug Prices Act applies to insurance plans offered on the individual marketplace, including through exchanges, as well as for plans offered by private employers. A separate bill would prohibit the practice for Medicare Advantage and Medicare Part D plans.

“It’s just wrong for people to overpay for their medication simply because their pharmacist is not allowed to tell them they could pay a lower price with cash instead of insurance,” said Sen. Debbie Stabenow (D-Mich.).

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