WASHINGTON, D.C. – Today, U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Finance Committee that sets national health policy, celebrated Senate passage of the Patient Right to Know Drug Prices Act, which prohibits an insurer or pharmacy benefit manager from using “gag clauses” that prevent pharmacists from providing drug price information to patients enrolled in health plans through the ACA exchange or private employer health insurance plans. This creates greater transparency and would lower the out-of-pocket costs of prescription drugs for patients across the country. Earlier this month, the Senate passed the Know the Lowest Price Act, which would provide this same protection for individuals who are covered by Medicare Advantage and Medicare Part D plans.

“Far too often, pharmacists know their patients could be saving money on prescription drugs, yet are banned from telling them,” said Sen. Menendez. “That is an outrage and completely ridiculous. With prescription drug prices skyrocketing, it is our duty to find ways to lower costs and make health care more affordable for patients. That’s why I fought for this common-sense legislation that will put an end to pharmacy gag clauses for ACA enrollees and those receiving insurance through their employers. This will help patients in New Jersey and across America access life-saving prescription drugs at a more affordable cost.”

Pharmacy “gag clauses” forbid pharmacists from proactively telling consumers if their prescription would cost less if they paid for it out-of-pocket rather than using their insurance plan. In March 2018, the Journal of the American Medical Association (JAMA) released a study that reviewed 9.5 million insurance claims and found 2.2 million of those claims involved overpayments because it would have been cheaper for the patient to pay out-of-pocket instead of paying their copay through their insurance. It also found that pharmacists are often prohibited from telling their patients that it would be cheaper to pay out-of-pocket than to pay their copay. A 2016 study by the National Community Pharmacists Association, which represents independent community pharmacies, found that 59% of responding pharmacists reported they were prevented by gag clauses from telling their customers about their drugs being cheaper out-of-pocket more than 10 times each month.

Sen. Menendez is also working to pass the Creating and Restoring Equal Access to Equivalent Samples Act (CREATES Act) and the Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE Act) to crack down on big Pharmaceutical companies that don’t play by the rules and block cheaper generic drugs from coming to market and require pharmaceutical companies who engage in price-gouging to explain to the public their reasons for hiking the prices of their medications.

The bipartisan CREATES Act would crack down on drug companies that intentionally delay the required sharing of product samples with generic manufacturers to develop generic versions of the brand-name drug. Under the bill, the branded pharmaceutical company could be held civilly liable and subject to damages for not providing samples in a timely fashion.

The SPIKE Act would require pharmaceutical companies who engage in price-gouging to explain to the public their reasons for hiking the prices of their medications when those increases exceed a certain benchmark. Under current law, drug manufacturers are not required to publicly report their price increases and there are no deterrents for price spikes. Specifically, it would apply to the most expensive medicines that have seen increases of over 15% in a year or 50% in five years, and drugs costing at least $10 per dose that have doubled in price within a year or tripled within five years. The bill calls for the Centers for Medicare and Medicaid Services (CMS) to publish each submission, together with an easily understandable summary, on its website. Manufacturers that fail to comply would be subject to civil monetary penalties.

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