WASHINGTON -- The Trump administration for the first time will require pharmaceutical companies to include the price of prescription drugs in television advertisements if the cost exceeds $35 per month.
The move, announced Wednesday by Alex Azar, the health and human services secretary, is the most visible action the administration has taken so far to address the rising cost of prescription drugs. It has been a key issue for American voters and one that both Republicans and Democrats have vowed to address.
The proposal could be challenged by the drug industry, which argues that revealing the list price will confuse consumers and could violate the companies' First Amendment rights. While the list price of some drugs can be thousands of dollars a month, patients with insurance that covers their prescriptions frequently pay far less, often less than $50.
"We are moving from a system where people are left in the dark to a system where patients are put in the driver's seat," Azar said in a conference call with reporters.
In ads, drug companies have been required to provide a list of potential side effects. Under the new guidelines -- expected to take effect this summer -- all direct-to-consumer television advertisements for drugs covered by Medicare or Medicaid must include the list price, also known as the wholesale acquisition price, in their ads, Azar said.
A disclaimer will also state, "if you have insurance that covers drugs, your cost may be different," according to officials at the Department of Health and Human Services.
Drugmakers must update the price they disclose every quarter, which will be the product's monthly cost or the price for a course of treatment if it is not a chronic medication. The disclosure must be in "legible" text at the end of the advertisement, much like the list of side effects.
Drugmakers also complained that the price reveal will infringe on their First Amendment free speech rights by forcing them to disclose prices. Azar pointed out that the government has for decades required car makers to post their sticker prices on vehicles.
The move has been pushed by patient advocacy groups, which have complained that televised drug ads -- amounting to about $4 billion of the $5 billion spent by the industry on product promotion -- steer patients to high-priced medications or drugs they do not need.
Many of the most heavily advertised drugs cost thousands of dollars per month. Two dosing pens of AbbVie's Humira, which treats rheumatoid arthritis and other conditions, have an average retail price of $5,684, according to the website GoodRx, which tracks drug prices. Another frequently advertised drug, Xeljanz, a Pfizer arthritis medication, costs about $4,840 a month.
The measure was applauded by Sens. Richard Durbin, D-Ill., and Charles Grassley, R-Iowa, who together have tried to pass similar legislation. "Direct-to-consumer prescription drug advertisements are everywhere, and they tell you just about everything imaginable about the drug, other than its price," the senators said in a joint statement. "We believe American patients deserve transparency."
The drug industry has pointed out that many patients with insurance coverage pay far less than the list price. "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 J. Ubl, chief executive of the Pharmaceutical Research and Manufacturers of America, the industry trade group.
The manufacturer Johnson & Johnson said this year that its ads would begin disclosing the list price, starting with those for the anti-stroke drug Xarelto that carries a $448 monthly list price, along with information about the typical consumer co-payment.
"If you're ashamed of your drug prices, change your drug prices," said Azar, who was a top executive with pharmaceutical giant Eli Lilly and Co. before joining the Trump administration in January 2018. "It's that simple."
Although most patients do not pay the full list prices that will be included in ads, experts say those are still important. Patient co-pays are often based on list prices. And many people who have high-deductible insurance plans pay list prices because their insurance doesn't start covering until patients spend several thousand dollars of their own money.
In other economically advanced countries, governments negotiate drug prices to keep medications more affordable for patients. But the U.S. has held back from government-set prices.
The regulations will take effect 60 days after they're published in the Federal Register.
Information for this article was contributed by Glenn Thrush and Katie Thomas of The New York Times and by Ricardo Alonso-Zaldivar of The Associated Press.
Business on 05/09/2019