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Bipartisan Paulsen-Eshoo Bill Targets Pharmacy "Gag Clauses"

WASHINGTON– Congressman Erik Paulsen (MN-03) and Congresswoman Anna Eshoo (CA-18) have introduced bipartisan legislation that takes aim at barriers that prevent pharmacists from informing consumers of the most cost-efficient way of paying for medications. Known as “gag clauses”, these rules prohibit pharmacists from proactively informing customers if the cost of a medication would be less out-of-pocket than if they paid through their insurance plan. With a gag clause in effect, consumers must specifically ask pharmacists if their medication is cheaper out-of-pocket. Pharmacists who volunteer this information could face penalties.

Consumers overpaid an estimated $135 million for medication in 2013 alone due to gag clauses.

The Paulsen-Eshoo legislation, the True Cost-sharing Of Seniors’ drugs Transparency (True COST) Act, gives the Department of Health and Human Services the authority to prohibit gag clauses. The legislation is similar to bipartisan measures authored by Senators Susan Collins (R-ME) and approved by the Senate Health Committee in July.

“Rising drug costs are a growing problem for Minnesota seniors and families,”said Congressman Paulsen. “These gag clauses tie pharmacists’ hands and keep them from getting more affordable medications to their patients.”

“One of the factors in the rising costs of prescription drugs is due to a lack of transparency. Families in my Congressional District and across the country keep struggling to afford the cost of medications they need,” Rep. Eshoo said. “This legislation lifts the outrageous restrictions currently in place that prevent pharmacists from informing consumers of the most cost-efficient way to pay for their medications.”

Specifically, the True COST Act (H.R. 6641):

•           Requires a study on the prevalence of gag clauses

•           Gives the Secretary of Health and Human Services the authority to prohibit gag clauses across insurance markets

•           Requires a pharmacy to inform a beneficiary of the effect of purchasing the drug out of pocket vs. through their insurance

•           Requires the pharmacy to inform a plan when a beneficiary pays out of pocket and the cost to ensure pharmacies are truly saving consumers money