Trump administration plans to require drug companies to include prices in ads

Trump administration plans to require drug companies to include prices in ads

Drug companies would be required to list prices in advertisements under a Trump administration proposal released Monday.

Under the new proposal, which was announced by Health and Human Services Secretary Alex Azar, drug manufacturers would need to state the list price of a 30-day supply of any drug that is covered through Medicare and Medicaid and costs at least $35 a month.

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The plan is the boldest step the administration has taken to date as part of its efforts to bring down drug prices, and puts the administration squarely at odds with the powerful prescription drug lobby.

"Patients deserve to know what a given drug will cost when they're being told about the benefits and risks it may have," Azar said during a speech Monday in Washington, D.C.

"And they deserve to know when a drug company has pushed its prices to abusive levels, and they deserve to know this every time they see a drug advertised to them on TV." 

The proposal will be officially published Wednesday, and will be open for public comment for 60 days.

According to HHS, the 10 most commonly advertised drugs have list prices ranging from $535 to $11,000 per month for a usual course of therapy. Under the proposal, companies would be required to post that information in clear, legible text onscreen at the end of the ad.

HHS officials said the agency will publish a list of companies that don’t comply with the policy. Those companies would also be subject to potential litigation, officials said during a press call.  

The pharmaceutical industry opposes the proposal, arguing it would confuse consumers because a drug’s list price is often lower than what the patient will actually pay.

PhRMA, the deep-pocketed trade group representing pharmaceutical companies in the U.S., tried getting ahead of Azar’s announcement, telling reporters Monday morning that its members would begin directing patients to more information about drug costs in television ads.

Every ad mentioning a prescription drug by name will include a voiceover or text telling patients to go to a company-sponsored website where they can find information about the list price, as well as a range of potential out-of-pocket costs and potential patient assistance. 

“We want patients to have more cost information and support using direct-to-consumer advertising,” said PhRMA President Steven Ubl, but “just including list prices is not sufficient and would be misleading.”

Azar acknowledged PhRMA's plan in his speech Monday afternoon, but said it doesn't go far enough. 

"It is no coincidence that the industry announced new initiative today that will help make price and cost information more accessible," Azar said. "We appreciate their effort. The placing information on website is not the same as putting it in an ad."

The group is likely to sue if the proposed regulation becomes final, but HHS officials said they are confident the rule would hold up under legal scrutiny.

“Broadcast advertisements are an area where the Supreme Court historically has recognized that the government may take special steps to help ensure that viewers receive appropriate information,” an HHS official said during a press call.

The administration’s proposal follows a failed bipartisan effort to include an amendment with similar disclosure requirements in a government funding bill. In September, House Republicans defeated the effort by Senate Democrats and Republicans.

 

Critics have said that disclosing list prices will not help bring down drug costs. An HHS official on Monday said the agency did not have any estimates about the impact the proposal would have on drug prices, but argued the proposal needs to be viewed through the range of efforts the agency is taking.

The costs to industry for implementing the rule will be “vastly outweighed by the indirect impact this will have as part of a suite of changes we are making across the system,” the official said.

“I can’t tell you this proposal on its own will have a numerical impact, [but] you can see all the actions we are taking across the department as part of the President’s blueprint are making an impact,” the official said.