New rule: Companies must reveal drug costs in TV ads

Drug companies are already required to disclose major and likely side effects in their print and broadcast advertising.

The move comes less than a year after the release of President Trump’s “American Patients First” plan for lowering drug costs. The blueprint laid out four strategies for solving the problems patients face: boosting competition, enhancing negotiation, creating incentives for lower list prices, and bringing down out-of-pocket costs.

To create better incentives for lower list prices, the blueprint called for HHS to consider requiring the inclusion of list prices in direct-to-consumer advertising. Less than a year later, this final rule has been published to implement the vision laid out in the blueprint.

HHS says the rule is “aimed at increasing transparency for patients and bringing down overall drug costs both for patients and for the Medicare and Medicaid programs.”

Health and Human Services Secretary Alex Azar announced the rule Wednesday. “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,” he said. “Patients who are struggling with high drug costs are in that position because of the high list prices that drug companies set. Making those prices more transparent is a significant step in President Trump’s efforts to reform our prescription drug markets and put patients in charge of their own healthcare.”

“Patients have the right to know the prices of healthcare services, and [the Centers for Medicare & Medicaid Services] is serious about empowering patients with this information across the board,” added CMS Administrator Seema Verma. “[This] final rule is an important step toward achieving President Trump’s vision for lowering prescription drug prices by bringing much-needed pricing transparency to the convoluted market for prescription drugs. Equipped with information on prescription drug prices, patients will be better able to make informed decisions and demand value from pharmaceutical companies.”

This final rule will require direct-to-consumer television advertisements for prescription drug and biological products covered by Medicare or Medicaid to include the list price—the wholesale acquisition cost—if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy, with the prices updated quarterly.

The 10 most commonly advertised drugs have list prices ranging from $488 to $16,938 per month or usual course of therapy.

If a manufacturer simply includes price information in a direct-to-consumer advertisement, that information in the advertisement will not require review by the FDA Office of Prescription Drug Promotion. OPDP does not review price information in prescription drug advertisements and does not intend to do so in the future, unless the price information explicitly or implicitly incorporates safety or efficacy information about the drug or makes express or implied claims about the safety or efficacy of the drug.

There are, as expected, critics of the plan.

“We are concerned that the administration’s rule requiring list prices in direct-to-consumer television advertising could be confusing for patients and may discourage them from seeking needed medical care,” said the Pharmaceutical Research and Manufacturers of America (PhRMA), a trade association.

Since 2000, PhRMA member companies have invested more than $600 billion in the search for new treatments and cures, including an estimated $71.4 billion in 2017 alone.

The group leveraged the opportunity to announce the launch of a new platform for patients, caregivers, and healthcare providers called the Medicine Assistance Tool (MAT). PhRMA partnered with consumer, patient, pharmacist, and provider groups to develop MAT.

The tool links to the Websites referenced in company direct-to-consumer (DTC) television advertising and includes a search tool to help patients connect to financial assistance programs.

As part of this effort, the PhRMA board of directors adopted enhancements to its voluntary DTC principles to state that “all DTC television advertising that identifies a prescription medicine by name should include direction as to where patients can find information about the cost of a medicine, such as a company-developed website, including the list price and average, estimated, or typical patient out-of-pocket costs, or other context about the potential cost of the medicine.”

MAT provides patients, caregivers, and providers with links to these new Websites and includes a search engine to connect patients with medicine-specific financial assistance programs.

MAT expands upon the Partnership for Prescription Assistance (PPA), which has helped connect more than 10 million patients to public and private assistance programs over the last decade. Patients visiting PPARX.org will now be redirected to what was called a more comprehensive resource.

“This effort is just one of several ways our members are working to ensure patients have the information they need to make more informed health care decisions,” PhRMA wrote. “While we are still reviewing the administration’s rule, we believe there are operational challenges, particularly the 60-day implementation timeframe, and think the final rule raises First Amendment and statutory concerns.”