Trump administration to require drug prices in TV ads

Author: Tami Luhby, CNN
Published: Updated:

Drug makers will have to start including the list price of medications in their television ads, the Trump administration announced Wednesday.

The move is the first rule implemented from the administration’s blueprint to lower drug costs, which was released a year ago.

“Requiring the inclusion of drugs’ list prices in TV ads is the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the healthcare they receive,” said Health & Human Services Secretary Alex Azar.

Lowering drug prices has been a central focus of President Donald Trump, as well as lawmakers on both sides of the aisle. The House is expected to vote on a bipartisan drug price measure Wednesday aimed at making lower-cost generic drugs more available.

Experts, however, have questioned the usefulness of providing list prices of medicine in ads, as most people with insurance pay far less. They fear that advertising list prices may scare patients away from drugs they could actually afford with their health insurance coverage.

A study published in January found that the ads will be less effective if drug companies can include additional information, such as saying that medications may cost nothing because of insurance coverage or manufacturer discounts.

The new requirement is the latest move against the pharmaceutical industry by an administration that’s been friendly to other interests, such as oil, and the drug companies have fought it fiercely.

The Pharmaceutical Research and Manufacturers of America, the industry’s main lobbying group, said Wednesday that the rule raises First Amendment and statutory concerns, as well as challenges in implementing it in 60 days. It rolled out a voluntary measure last October to direct consumers during TV ads to drug maker websites for pricing information instead of including the specific list price in ads.

“We are concerned that the administration’s rule requiring list prices in direct-to-consumer (DTC) television advertising could be confusing for patients and may discourage them from seeking needed medical care,” said Stephen Ubl, the group’s CEO.

But Azar told reporters Wednesday that the industry effort is not enough. Drug makers will have to include the price for any medication that costs more than $35 for a month’s supply or the usual course of treatment. The agency picked that price because it’s roughly the average co-pay for a preferred brand name drug.

While the new rule does not have an enforcement mechanism, Azar said that failing to include the price would be considered a deceptive trade practice and could prompt lawsuits by industry rivals.

Knowing a drug’s price will give patients more information when they meet with their doctors to discuss treatment options, Azar said. It could also prompt physicians to consider less expensive options.

However, the agency can’t say how much consumers will save because their response to the ads is too unpredictable, the secretary said.

The secretary pushed back on criticism that including the list price isn’t useful, noting that the ads will say that those with health insurance could pay a different amount. But he also pointed out that consumers must pay the full price until they hit their deductible, and even after that, their co-pays are based on the list price.

“Claiming list prices don’t matter is almost the same thing as claiming there’s no problem with high drug costs at all,” Azar said. “I don’t think many American seniors or patients with serious illnesses would say that’s the case.”

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