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Paulsen, Colleagues Introduce Bipartisan "Gag Clause" Legislation

WASHINGTONCongressman Erik Paulsen (R/MN-03) joined Reps. Buddy Carter (R-Ga.), Anna Eshoo (D-Ca.), Lloyd Doggett (D-Tx.) and others on Friday to introduce the Know the Cost Act, bipartisan legislation that prohibits “gag clause” provisions that limit the ability of pharmacists to inform patients of the most cost-efficient way of paying for medications.

Currently, Pharmacy Benefit Managers (PBMs) may include requirements in contracts that prevent pharmacists from providing advice to their patients on the best and cheapest out-of-pocket alternatives to medications covered under insurance. This is commonly known as a "gag clause." As a result, patients may be paying more for their prescriptions than is warranted.

The Know the Cost Act prohibits group health plans offered by employers and individual health insurance plans, as well as Medicare Advantage and Medicare Part D Plans, from restricting a pharmacy’s ability to inform a patient about the lower cost, out-of-pocket price options for their prescription. Additionally, the measure will require notifications to Medicare beneficiaries of the potential outcomes of paying out-of-pocket rather than with insurance.

“Families shouldn’t have to walk into a pharmacy wondering if they’re overpaying for their medications,”Rep. Paulsen said. “This bipartisan bill will improve transparency in drug pricing and lower out-of-pocket healthcare costs for middle-class Minnesota families.”

The measure is similar to legislation introduced by Paulsen and Eshoo last month, and reflects cooperation between members of both the House Ways and Means and Energy and Commerce Committees.

This measure was approved on Friday by the Energy and Commerce Committee's Health Subcommittee. Similar legislation was passed by unanimous consent in the Senate last week. The legislation now moves to consideration by the full House Energy and Commerce Committee.