End gag clauses that keep patients in dark about drug costs, CMS urges

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CMS sent a letter to companies providing Medicare Part D plans May 17, calling for an end to gag clauses in contracts between insurers, pharmacy benefit managers and pharmacies.

Gag clauses prevent pharmacists from telling patients when cash payment for a drug may be cheaper than their insurance copay. The letter is part of President Donald Trump’s  "American Patients First" initiative, an effort to lower the cost of prescription drugs.

"Many patients don't know that some drugs are actually more expensive when they use their insurance. What's worse is that some pharmacy benefits managers are preventing pharmacists from telling patients when this is happening, because they get a share of the transaction when the patient uses their insurance," said CMS Administrator Seema Verma. "Today we are taking a significant step towards bringing full transparency to all the back-end deals that are being made at the expense of patients."

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