New Laws Lift 'Gag Clauses' on Pharmacists
The changes ban rules in pharmacy contracts with insurers that prevented pharmacists from suggesting ways to save money on prescriptions.
When you pick up your prescription at your local drugstore, you may not be aware that the pharmacist might be prohibited from telling you whether you could save money by paying out of pocket instead of using your insurance.
Known as "gag clauses," the rules have been included in pharmacy contracts with insurers in more than a dozen states. But President Trump voiced his support for repealing the clauses, and on Wednesday he signed into law legislation that bans the clauses for private insurance, effective immediately, and in Medicare Advantage and Part D prescription-drug plans, effective January 1, 2020. At least 29 states also have passed laws in recent years to ban the gag clauses, according to the National Conference of State Legislatures.
Many consumers haven't heard about the clauses, or that even under the gag rules, a pharmacist could tell you about the lower price—if you know to ask.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Ditching the gag rules is a win for consumers. "There shouldn't be anything that prevents the pharmacist from talking honestly and candidly to consumers and giving them all the information they need to know," says Julie Carter, senior federal policy associate with the Medicare Rights Center.
In some cases, if you have a hefty co-pay, it might cost less to pay for a drug yourself, especially if you can use a manufacturer discount card or coupon. But if you use a Medicare Advantage or Part D plan to pay for your drug, you'll still be restricted on what discounts you can access, regardless of whether a gag clause exists, says Rich Sagall, president of NeedyMeds.org, which compiles drug discount resources.
Federal law prohibits drug companies from giving their coupons or discounts to people who get their health benefits through the federal government, because it would be considered a violation of the government's anti-kickback statute.
Medicare beneficiaries who want to cut costs should ask the pharmacist whether there's a generic or lower-cost drug available, and then figure out whether paying out of pocket and using a discount card would be less expensive than the insurance co-pay. Read "Retirees, Find Help to Cover Expensive Drug Costs" for more.
-
How to Safely Open an Online Savings AccountOnline banks offer generous APYs that most brick-and-mortar banks can't match. If you want to make the switch to online but have been hesitant, I'll show you how to do it safely.
-
7 Ways to Age Gracefully Like the Best Stock Photo SeniorsAs a retirement editor, I've gleaned valuable wisdom (and a lot of laughs) from one older couple that tops the seniors' stock photo charts.
-
My First $1 Million: Banking Executive, 48, Southeast U.S.Ever wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
9 Types of Insurance You Probably Don't NeedFinancial Planning If you're paying for these types of insurance, you may be wasting your money. Here's what you need to know.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
457 Plan Contribution Limits for 2026Retirement plans There are higher 457 plan contribution limits in 2026. That's good news for state and local government employees.
-
Medicare Basics: 12 Things You Need to KnowMedicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
-
The Seven Worst Assets to Leave Your Kids or Grandkidsinheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
-
SEP IRA Contribution Limits for 2026SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $70,000 in 2025, and up to $72,000 in 2026.
-
Roth IRA Contribution Limits for 2026Roth IRAs Roth IRAs allow you to save for retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2026 limits and income-based phaseouts.
-
SIMPLE IRA Contribution Limits for 2026simple IRA For 2026, the SIMPLE IRA contribution limit rises to $17,000, with a $4,000 catch-up for those 50 and over, totaling $21,000.
