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Senate panel to vote next week on banning 'gag clauses' in pharmacy contracts

Senate panel to vote next week on banning 'gag clauses' in pharmacy contracts
© Greg Nash

The Senate health committee will vote next week on a bill that would ban "gag clauses" that prohibit pharmacies from telling customers they can save money on a drug if they pay with cash instead of insurance. 

Such clauses are sometimes inserted into contracts pharmacies have with insurers or pharmacy benefit managers — the middlemen that manage pharmacy benefits for insurance companies and employers. 

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The clauses prevent a pharmacist from telling a customer if, for example, their $20 co-pay is higher than the pharmacy’s cash price for a drug. 

The bill, sponsored by Sen. Susan CollinsSusan Margaret CollinsThe Hill's Morning Report — Presented by the Coalition for Affordable Prescription Drugs — Health care a top policy message in fall campaigns Susan Collins and the mob mentality Graham: I hope Dems 'get their ass kicked' for conduct around Kavanaugh MORE (R-Maine), would ban the use of these clauses, freeing up pharmacies to volunteer that information.

“It’s so counterintuitive to think that paying out of pocket is going to be cheaper than using your insurance,” Collins said at an event earlier this week. “Using your debit card is going to be cheaper than using your insurance card? Who’s going to ask that?”

She added: "This situation reveals a troubling lack of transparency in the pharmaceutical system." 

The committee will vote on the ban July 25 at 10 a.m.