Gag clauses are at the forefront of state policy decisions as state policymakers attempt to reduce the cost of prescription medications. Gag clauses are established in PBM-pharmacy contracts prohibit pharmacists from informing consumers, unless asked, about cheaper ways to purchase prescriptions or access more effective alternatives, i.e., a lower cost generic drug or newer brand name drug with better outcomes. From 2016 to 2018, 22 states enacted legislation to prohibit the use of gag clauses to provide consumers and pharmacists more ability to communicate about cheaper options. Another nine states have legislation still pending. Eight states have legislation regulating pharmacy benefit managers, or PBMs, through audits, licensing and maximum allowable cost statutes that do not directly address gag clauses. More than eight states have Maximum Allowable Cost (MAC) statutes and auditing and licensing procedures enacted, however they also address gag clauses or claw backs specifically in their bill.
