OBJECTIVES: To estimate the frequency in which gag rules – contractual provision that prohibits the pharmacist from telling the customer when the cash price of a drug is lower than its copayment- are applied, identify the drugs most commonly involved, and determine what drug characteristics are associated with such transactions.

METHODS: The study used two data sets to evaluate patient cost-sharing and pharmacy prices at the National Drug Code level. Patient-level cost was sourced from a 2014 sample of a large commercial claims database- Truven Health Marketscan. Pharmacy prices were estimated based on acquisition costs from the National Drug Acquisition Cost dataset and dispense fees were sourced either from published literature or Marketscan. Drug characteristics were retrieved from Redbook. Patient cost-sharing amounts and pharmacy prices were analyzed stratified by different drug characteristics. Final sample included n=17,709 unique drugs. An outcome variable was generated to sum the number of times each drug was purchased in a transaction in which total cost was less than the cost-sharing amount. A weight variable was generated by dividing the outcome by the number of claims per drug. Descriptive statistics and a weighted Negative Binomial Regression Model were run.

RESULTS: In this sample, 45% of drugs were involved in at least one transaction in which patient’s cost-sharing was higher than the total cost of the drug. The top 5 most commonly involved drugs were Losartan Potassium, Lisinopril, Metformin, Amlodipine Besylate, and Atorvastatin Calcium. Generic category significantly increased the expected frequency of “gag-rule” transactions, compared to a single source brand category. Drugs for a primarily chronic indication significantly decreased the expected frequency of such transactions, compared to acute or both acute & chronic indications.

CONCLUSIONS: Results suggest that the gag rule is widely exercised. Among drug types, generic drugs especially seem to be involved.