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Federal Legislation to Improve Prescription Drug Transparency Signed into Law

October 11, 2018

Yesterday, federal legislation that will help American consumers better afford prescription medications was signed by the President. The bipartisan legislation comprised of two bills, the Patient Right to Know Drug Prices Act and Know the Lowest Price Act of 2018, prohibits “gag clauses” that prevent pharmacists from telling consumers if they could save money by buying prescription drugs out-of-pocket rather than using their health insurance.

Previously, pharmacists often could not legally share information with consumers about drug pricing that would benefit them. Health plans, insurers, and companies that manage pharmacy benefits often included clauses in the fine print of pharmacy contracts that prohibited pharmacists from sharing cost information with consumers.

Between 2016 and March 2018, at least seven states enacted laws prohibiting “gag clauses” in contracts that restrict pharmacists. Mississippi and Virginia laws were signed during March 2018.

Although the new legislation doesn’t directly affect the ever-increasing cost of prescription medications, removing the so-called “gag clauses” will enable pharmacists to assist consumers in effectively shopping around for and getting the best deal on their prescription medications.

For more information on HAP’s work to promote greater transparency, please contact Jolene Calla, Esquire, HAP’s vice president, health care finance & insurance. Questions pertaining to federal advocacy may be directed to Laura Stevens Kent, HAP’s vice president, federal advocacy.

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