Patient Right to Know Drug Prices Act - S. 2554

The House cleared by voice vote a pair of Senate bills aimed at making it easier for patients to get the lowest price on prescription drugs at the pharmacy counter.

Summary

Both the Patient Right to Know Drug Prices Act, S. 2554 (115), and the Know the Lowest Price Act, S. 2553 (115), prohibit "gag clauses" that prevent pharmacists from telling customers whether they could save money by buying prescription drugs out-of-pocket rather than using their health insurance.

S. 2553 bars gag clauses in Medicare Advantage and Part D plans, while S. 2554 targets private health plans, including those in the ACA/Obamacare market.

Background

“Gag clauses” buried in the fine print of pharmacy contracts — and imposed by pharmacy benefit managers (PBMs) — prevent many pharmacists from telling customers when the cash price for a medicine may be less expensive than their insurance co-pay unless the customers directly ask.

PBMs are the middleman acting as a negotiator between drug companies and insurance companies to determine what prescriptions are covered by a given health plan. It is the PBM that determines what individuals from an insurance network pay for a drug, and which pocket any difference between costs to pharmacies and patients.

For their part, top PBMs insist they do not include “gag clauses” in their contracts — which tend to contain broad confidentiality rules rather than a single, specific prohibition on sharing the true cost of a drug at the pharmacy counter.

The bills are on the path to becoming the first drug pricing legislation enacted since the Trump administration unveiled a blueprint for lowering drug costs. Outlawing gag clauses had been one of the central tenets of that plan.

Cost

CBO estimates that implementing the reporting requirements under Section 3 would reduce spending subject to appropriation, on net, by

$3 million over the 2019-2023 period, assuming appropriation actions consistent with the bill.

CBO estimates that enacting S. 2554 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods

beginning in 2029.

S. 2554 would impose private sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) by prohibiting certain insurers from

restricting pharmacists’ ability to share information about drug prices and by requiring certain patent agreements to be filed with the federal

government. CBO estimates the cost of the mandates would fall below the private-sector threshold established in UMRA ($160 million in 2018,

adjusted annually for the inflation). The bill contains no intergovernmental mandates as defined in UMRA.