HHS finalizes rule requiring drug prices in TV ads
Friday, May 17, 2019
Frustrated viewers of nearly every television program barraged by advertisements of drug commercials that feature all the medicine’s benefits, the litany of potential side effects, etc. — but who receive no pricing information — are getting a little reprieve.
Those ads will soon change slightly, according to the Trump administration, which has finalized a rule that will require pharmaceutical companies to disclose the price of their products in television advertising as soon as summer 2019.
Pharmaceutical companies and drugmakers have stood in opposition of this rule from taking effect, but HHS says efforts by these companies — such as directing patients to websites for pricing information — is not enough to make a significant difference in pricing transparency.
The Department of Health and Human Services (HHS) is going so far as to say that since the drug companies benefit so much from selling directly to consumers via the TV, they should disclose costs via the same channels. Thus, like cars and other direct-to-consumer goods being sold and priced on television, pharmaceuticals should be no different.
Billions are spent each year by drugmakers marketing their wares directly to the public, most of which comes in the form of the 30- or 60-second television spots. "We're telling drug companies today that you've got to level with people what your drugs cost," HHS Secretary Alex Azar said on a call with reporters. "Patients have a right to know and, if you're ashamed of your drug prices, change your drug prices."
According to the HHS announcement of the program, the 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."
Meanwhile, the 10 most commonly advertised drugs have list prices ranging from $488 to $16,938 per month or usual course of therapy. "Patients deserve to know what a drug costs as they discuss their options with their doctor," HHS said in its statement.
Also, per HHS, 7% of Americans have high-deductible health insurance plans, under which they often pay the list price of a drug until they have spent through their deductible. All seniors on Medicare Part D have co-insurance for certain types of drugs, which means their out-of-pocket expenses are calculated as a share of list price. List prices are also what patients pay if a drug is not on their insurance formulary.
All of this to say that Americans, who are on the hook for a good bit of the out-of-pocket expenses required by their plans, likely want to know roughly how much they will have to spend on their drugs, and now can via the TV ads.
The final rule, part of the "American Patients First" blueprint, will go into effect 60 days after it is published in the Federal Register.
The rule allows drug companies to provide additional information about expected costs for insured patients and other helpful information, if they choose.
One disclaimer is that if a manufacturer simply includes price information in a direct-to-consumer advertisement as required, that information in the advertisement will not require review by the FDA Office of Prescription Drug Promotion (OPDP).
"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," the statement said.
Drugmakers would be required to include text in their television ads that states the list price for either a 30-day supply or a typical course of treatment for the product being marketed. The statement would also note that costs may differ if a consumer has health insurance that covers drugs.
"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 Stephen Ubl, president of the drug lobby PhRMA, in a statement.
How HHS ensures compliance is to be determined. The agency plans to publish a list of companies that are in violation of the requirement and expects competitors would sue citing false and misleading advertising under the Lanham Act.
The U.S. and New Zealand are the only countries that allow for direct-to-consumer pharmaceutical adverting that includes product claims.
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