Congress Follows Maryland Lead and Passes Law to Ban Prescription Drug “Gag Clauses”

Maryland law goes into effect October 1st.

BALTIMORE, MD.    Congress has passed important legislation to reduce drug prices by banning the so-called “gag clauses” that stop patients from knowing about the lowest-cost drug options. The “Patient Right to Know Drug Prices Act” and the “Know the Lower Price Act” will help Americans be better-informed about drug costs and will help bring down prices. The measures resemble legislation passed in Maryland in 2017 and championed by the Maryland Citizens’ Health Initiative. The Maryland law will go into effect on Monday, October 1, 2018.

Vincent DeMarco, President of Maryland Citizens’ Health Initiative, issued the following statement about Congress’ action.

“We are excited that Congress has stood up for consumers and passed legislation to get rid of the gag rules that helped drive up drug costs. These actions by Congress echo the groundbreaking work we have done in Maryland to rein in soaring drug costs. This year, we passed a state law to ban these kinds of gag rules that hurt consumers and benefited drug companies and middlemen, which will go into effect next week, on Monday, October 1. Under the leadership of Sen. Katherine A. Klausmeier and Del. Eric M. Bromwell, the General Assembly took decisive action to make drug costs more transparent, and we applaud them for standing with average Marylanders.   Now it’s time to create a Prescription Drug Affordability Board to establish fair and affordable costs for high-price prescription drugs. Drugs don’t work if people can’t afford them, and too many Marylanders struggle to pay for medications. We must act in 2019 to bring down the costs of drugs that people rely on to lead healthy lives.”

Background on the congressional legislation – courtesy of Patients for Affordable Drugs Now:

  • Currently, pharmacy benefit managers (PBMs) sometimes include gag clauses in their contracts that prevent pharmacists from telling patients if paying cash for a medication is cheaper than paying through their insurance.
  • The “Patient Right to Know Drug Prices Act” blocks insurers or PBMs from prohibiting pharmacies from informing customers of the difference between the insurance co-pay and the actual cost of a drug. The “Know the Lower Price Act” would do the same for people covered under Medicare Advantage and Medicare Part D plans.
  • The “Patient Right to Know Drug Prices Act” also includes a provision that will expand current law to include biologic and biosimilar drugs requiring all pay-for-delay deals to be submitted to the FTC.
  • Estimates suggest that consumers overpay on prescriptions 23 percent of the time, so passage of these bills could increase options and decrease prices for patients.