RxLegal: Pharmacist Gag Clauses

Abstract

Much publicity has surrounded the use of gag clauses in contracts between insurance companies or their pharmacy benefit managers (PBMs) and pharmacies. These clauses prohibit pharmacists from voluntarily informing patients that their prescription medication may cost less if paid for directly by them instead of through their insurance. By concealing the least expensive way to purchase a medication, critics state that gag clauses reduce transparency and medication affordability for patients and appear to be counterintuitive to one of the major activities of a PBM—negotiation of drug pricing. Due to the uproar surrounding these clauses, the bipartisan Patient Right to Know Drug Prices Act was recently introduced in Congress to effectively ban the practice.