Many perspectives, 1 simple etiquette

Senate Overwhelmingly Approves Bill to End Pharmacy "Gag Clauses"

Created: 18 September, 2018
Updated: 17 October, 2022
2 min read

The Senate nearly unanimously approved a bill Monday that would prohibit "gag order" clauses that prevent pharmacies from telling customers about cheaper drug options. The bill -- the Patient Right to Know Drug Prices Act -- passed 98-2.

The issue has broad support across the political spectrum -- from US Sen. Bernie Sanders to President Donald Trump.

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. #AmericanPatientsFirst

— Donald J. Trump (@realDonaldTrump) September 17, 2018

Many Americans may not be familiar with what these gag clauses are as the subject gets little attention in the media.

In short, insurance companies and drug middlemen -- called Pharmacy Benefit Managers (PBMs) -- put "gag order" clauses in contracts with pharmacies that prevent pharmacists from informing their customers if it is cheaper to pay for a drug out-of-pocket rather than through their insurance.

As little of a known fact as this is, even less know that nearly 60% of pharmacists in the US are under such "gag clauses" that protect the interests of insurance companies and PBMs over the interests of consumers.

There are a lot of myths out there about the pharmaceutical drug industry and how drug pricing actually works. For instance, while many people think most of the profits go to drug manufacturers -- or "Big Pharma" as some call them -- this process is much more complex.


Check out this more detailed explanation about how the "prescription industrial complex" works here

What is most important to explain for this story is that PBMs were meant to be independent, private groups that helped control the price of prescription drugs (read: keep the prices in check) from manufacturer to pharmacy. But at the end of the day, these companies end up setting the price for approximately 80% of the prescription drug market and few would say prices have been kept in check.

ALSO READ: Don’t Like Big Pharma? Meet the PBMs…

The "gag orders" play a major role in how much control the PBMs have over the market, and has become. Though banning these "gag orders" won't affect the price of drugs much, it will allow consumers to be better informed of their pricing options.

The two senators who voted against the Patient Right to Know Drug Prices Act were US Sens. Rand Paul (R-Ky.) and Mike Lee (R-Utah).

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