Drug companies are being required to post list prices in television ads

Drugmakers will be required to post the list prices of their drugs in television ads, in a rule proposed by the Centers for Medicare and Medicaid Services on Monday.

The rule applies to all prescriptions covered under Medicare and Medicaid, which is virtually all drugs. The posting would take the form of a legible textual statement at the end of the ad. 

The initiative, from President Trump's May blueprint to lower prescription drug costs, is expected to get push-back from the pharmaceutical industry, which last year brought a lawsuit challenging California's drug pricing law, saying it violates drugmakers' First Amendment free speech rights.

Of the federal rule, the Pharmaceutical Research and Manufacturers of America said list prices are not a good indicator of what a patient will pay at the pharmacy counter and do not reflect discounts and rebates negotiated by insurers and pharmacy benefit managers.

"In addition, any such requirement would raise significant legal issues, including First Amendment concerns," PhRMA said.

CMS is limiting the price disclosure requirement just to TV ads because the majority of the $5.5 billion spent on drug advertising is for television commercials, it said.

But the agency is seeking comment for 30 days, including whether the rule should apply beyond television. Comments are being accepted until December 17.

Under the proposed rule, the price required to be posted would be for a typical course of treatment for an acute medication like an antibiotic, or a 30-day supply of medication for a chronic condition that is taken every month,

CMS would provide an exception to the requirement to post prices for prescription drugs with list prices of less than $35 per month.

THE IMPACT

The rule is part of the agency's efforts to lower prescription drug prices and other healthcare costs.

Currently, manufacturers are required to publish the impact of the drug on health, but not on the wallet, CMS said.

Forty-seven percent of Americans have high deductible health plans. Patients often pay their cost-sharing or deductible off of a drug's list price. 

Enforcement would take place through a Department of Health and Human Services public list of drugs that were advertised in violation of this rule. 

THE TREND

The agency has taken action to promote transparency in other areas, such as by requiring hospitals to post their standard charges online in a machine-readable format.

ON THE RECORD

"We are committed to price transparency across-the-board, and prescription drugs are no different," said CMS Administrator Seema Verma. "Today's proposed rule would ensure that those list prices are included in television advertisements, so patients have the information they need to make informed decisions."

Dr. Barbara L. McAneny, president of the American Medical Association, said, "Although the American Medical Association is opposed to direct-to-consumer advertising of prescription drugs, as long as the practice is allowed, the ads should come with at least a small dose of transparency. Last year, the AMA called for regulations requiring the ads to include the manufacturer's suggested retail price of those drugs, and we supported similar legislative efforts by Senators Grassley and Durbin earlier this year.  While this proposed rule alone won't remove the often-misleading nature of prescription drug ads, it will give consumers a data point that is currently unavailable. That is a step in the right direction."

Matt Eyles, president and CEO of America's Health Insurance Plans said, "Drug prices are out-of-control, and we commend the administration for taking such bold action to lower prices for patients, proposing that manufacturers would be required to disclose their prices in most direct-to-consumer advertisements."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com