What Pharmacies Need to Know About the “Know the Lowest Price Act” and the “Patients’ Right to Know Drug Prices Act”

Two recently enacted federal laws important to pharmacies, the “Know the Lowest Price Act” and the “Patients’ Right to Know Drug Prices Act” were recently signed into law. The laws are designed to remove vagueness in pharmaceutical pricing and to eliminate gag clauses in provider agreements between pharmacy benefit managers (PBMs) and pharmacies. Such gag clauses would prevent a pharmacist from disclosing to the patient that the copayment exceeded the cash price of the drug. As a consequence, patients overpaid and the PBMs recouped the excess amounts from the pharmacy and pocketed the overpayment. Pharmacies had been literally “gagged” from sharing the lowest prescription cost with the consumer.

But, with the passage of the Patient Right to Know Drug Prices Act, Section 2729 of the Affordable Care Act, and Know the Lowest Price Act, Section 1860D–4 of the Social Security Act, pharmacies are now able to inform the consumer if their prescription would cost less if they paid an out-of-pocket cash price, rather than using insurance. The Know the Lowest Price Act prohibits gag clauses in Medicare Advantage and Part D plans while the Patient Right to Know Drug Prices Act prevents gag clauses in employer-sponsored and health care exchange plans. 

Historically, PBMs would threaten termination from networks if pharmacies violated gag clauses. Frier Levitt is currently investigating the practice where PBMs are charging patients a copayment in excess of the cash price. Contact Frier Levitt today if your pharmacy or patients are being targeted by the PBMs for sharing with consumers the best prescription drug price.