Udall, Heinrich Announce Passage Of Bill To Prohibit “Gag Clauses” That Cause Consumers To Overpay For Prescriptions

WASHINGTON, D.C. - U.S. Senators Tom Udall (D-N.M.) and Martin Heinrich (D-N.M.) announced the passage of the Patient Right to Know Drug Prices Act to put an end to the use of "gag clauses" by health insurers and pharmacy benefit managers, an egregious practice that conceals lower prescription drug prices from patients at the pharmacy, causing consumers to needlessly overpay.  The bipartisan bill, introduced by U.S. Senators Claire McCaskill (D-Mo.) and Susan Collins (R-Maine) and cosponsored by Udall and Heinrich, now goes to the House of Representatives for consideration.

"It's simple: medicine should be about helping people live healthier lives, not gouging profits out of them. This bill is a common-sense fix that will lower costs for New Mexicans who just want to get the prescriptions they need," said Udall. "I will continue fighting to hold Big Pharma accountable and bring down massive prescription costs, because nothing should ever stand between New Mexico families and their health- especially not an insurance company 'gag rule' that blocks your pharmacist from telling you how to get a lower price." 

"The Patient Right to Know Drug Prices Act would allow pharmacists to inform patients filling prescriptions of lower cost alternatives. I'm proud to cosponsor this commonsense bill to put the consumer in the driver's seat. I will continue to make lowering prescription drug costs for New Mexicans a top priority," said Heinrich.

Pharmacy gag clauses forbid pharmacists from proactively telling consumers if their prescription would cost less if they paid for it out-of-pocket rather than using their insurance plan.  Pharmacists who disobey these clauses face significant penalties.  The Patient Right to Know Drug Prices Act would prohibit an insurer or pharmacy benefit manager from restricting a pharmacy's ability to provide drug price information to a customer when there is a difference between the cost of the drug under the plan and the cost of the drug when purchased without insurance.  This bill would apply to plans offered by private employers and in the individual market.

A study published in the Journal of the American Medical Association that reviewed 9.5 million insurance claims found that 23 percent of prescriptions filled through insurance ended up costing more for customers than if they had paid out of pocket. 

Udall and Heinrich have made tackling rising health care and prescription drug costs a top priority in the Senate. They are cosponsors of legislation that would allow for Medicare to negotiate the best possible price of prescription drugs to cut costs for nearly 41 million seniors enrolled in Medicare Part D.