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Consumers Should Know Best Prices for Prescriptions

AARP supports 2 bills that would allow pharmacists to reveal lowest drug costs

spinner image A pharmacist scanning a bottle of pills
Some pharmacists say that they are prohibited from telling customers that the cash price of their medicine is cheaper than the copay their insurance requires.
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AARP is supporting federal legislation that would allow pharmacists to tell customers if their prescription drug would be cheaper if they bought it without using insurance. The proposed law would ban so-called gag clauses that prevent pharmacists from providing that information to consumers.

Some pharmacists say they're prohibited from telling customers that the cash price of a prescription is cheaper than the copay their insurance requires because of gag clauses in the contracts pharmacies sign with pharmaceutical benefit managers, also known as PBMs. PBMs manage most prescription drug benefits for insurers, employers and some government programs, including Medicare Part D plans.

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Two bipartisan bills introduced in the Senate in March would ban gag clauses. Both were coauthored by Sens. Susan M. Collins, R-Maine, Debbie Stabenow, D-Mich., and Claire McCaskill, D-Mo. One measure would ban gag clauses in Medicare Part D prescription drug and Medicare Advantage plans. The other would prohibit such clauses in Affordable Care Act marketplace plans and in employer-based coverage.

A report in the Journal of the American Medical Association found that about 25 percent of the time, patients paid more for their prescription using insurance than the cash price of the medicine. The vast majority of the affected drugs were generic, and the average overpayment was around $8.

“AARP strongly supports efforts to reduce out-of-pocket costs related to prescription drugs for older Americans,” Joyce Rogers, AARP senior vice president for government affairs, wrote in letters to Collins, Stabenow  and  McCaskill, supporting their legislation. The bills, she says, will help to reduce overpayments for prescriptions “by allowing pharmacists to inform patients about all of the prices available to them when they purchase needed medications.”

Some state legislatures have already taken action to restrict these gag clauses. According to the National Conference of State Legislatures, 22 states have enacted such laws over the past two years.

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