Secretary Azar Pledges to Work with Senator Collins on Legislation to Prohibit Gag Clauses That Cause Consumers to Overpay for Medications

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Washington, D.C.—At a Senate Health Committee hearing today, U.S. Senator Susan Collins, a member of the Committee, questioned Alex Azar, the Secretary of Health and Human Services on actions his Department is taking to lower drug prices.  This was the fourth in a series of hearings the Committee has held this Congress focused on reducing the cost of prescription medications.

During the hearing, Secretary Azar reaffirmed to Senator Collins his opposition to pharmacy gag clauses.  Senator Collins has spearheaded a bipartisan effort with Senators Claire McCaskill (D-MO) and Debbie Stabenow (D-MI) to eliminate this egregious practice that some companies use to conceal prices from patients at the pharmacy. This causes many consumers to needlessly overpay for their prescription.

“I was very pleased this morning to hear you endorse the prohibition on gag clauses...” said Senator Collins.  “I was behind a couple at the pharmacy counter recently who found out that their copay was $111 and said, ‘We can’t afford that’ and walked away.  I asked the pharmacist, ‘Does this happen often?’ and he told me [that it happens] every single day.  And that really troubles me.  It was pharmacists who brought to my attention the fact that these gag clauses exist.”

Secretary Azar acknowledged that Senator Collins was “the one that raised [pharmacy gag clauses] to [his] attention during the confirmation process,” and he called the practice “unconscionable.”

Senator Collins went on to express her support for a letter the Centers for Medicare and Medicaid Services recently sent to companies that provide Medicare Part D prescription drug coverage, which informed them that gag clauses are “unacceptable and contrary to our efforts to promote drug price transparency and lower drug prices.”  She observed, however, that CMS’ action did not apply to the Affordable Care Act exchanges or other health insurance plans, underscoring the need for legislation she introduced with Senators McCaskill and Stabenow that would prohibit gag clauses altogether.

In response, Secretary Azar pledged that the Department of Health and Human Services would work with Senator Collins on legislation to stop gag clauses “because we think patients have the right to know what their out-of-pockets are and what their lower cost alternatives are.”

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As the Chairman of the Senate Aging Committee, Senator Collins has led efforts in Congress to increase the affordability and accessibility of prescription drugs.  In 2015, Senators Collins and McCaskill launched the landmark bipartisan Senate investigation into the causes, impacts, and potential solutions to egregious price spikes for certain generic, off-patent drugs.  They released a report on their investigation in 2016.  Following their investigation, Senators Collins and McCaskill authored a bill to improve generic competition and lower the cost of prescription drugs that was signed into law as part of the FDA Reauthorization Act.  She has also recently chaired hearings on the rising cost of insulin as well as therapies for rheumatoid arthritis.