Pharmaceutical Commercials to Soon Show Drug Prices
For the first time ever, companies will be required by the Trump administration to include pharmaceutical drugs prices in their television ads if the cost is greater than $35 per month. Health and Human Services Secretary Alex Azar II made the announcement in early May, revealing the boldest action taken so far by the administration that addresses the rising costs of medications, after both major political parties vowed recently to address the concerning increase.
It has been a key issue for American voters for the past several years.
Pharma companies are expected to challenge the proposal, claiming that it would violate their first amendment rights and confuse consumers. Monthly list prices for some medications can run in the thousands of dollars, but patients with insurance coverage often pay much less. Azar said in a recent statement, “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.”
At the other end of the spectrum is Stephen J. Ubl, Chief Executive of the Pharmaceutical Research and Manufacturers of America, who said, “We are concerned that the administration’s rule requiring list prices in direct-to-consumer (DTC) television advertising could be confusing for patients and may discourage them from seeking needed medical care.”
Some of the most heavily advertised medications currently carry a hefty price tag: Xeljanz, an arthritis medication by Pfizer, runs about $4,840 per month and Humira, by AbbVie, which also treats arthritis, comes in at a whopping $5,684 per month on average, according to the website GoodRx.
At present, pharma companies are required to disclose potential side effects of their medications; under the new guidelines, which should take effect in the summer of 2019, all TV ads for drugs covered by Medicaid or Medicare must also include the wholesale acquisition price, also known as the list price.
Would that damage sales of prescriptions?
Not necessarily.
Companies will also be allowed to include a disclaimer stating that if viewers have insurance that covers the drug, their costs may be different. This is according to spokespersons at the Department of Health and Human Services.
Behind the scenes, there are additional requirements for companies: every quarter, they must update the pharmaceutical drugs prices – either the monthly cost or the price for a course of treatment. In addition, this disclosure must be in legible text at the end of the TV ad.
The pharmaceutical industry currently spends $5.9 billion a year on product promotion, and almost $4.5 billion of that is on television advertisements. Patient advocacy groups have long complained that the ads currently guide patients to high-priced medications they don’t really need.
“Direct-to-consumer prescription drug advertisements are everywhere, and they tell you just about everything imaginable about the drug, other than its price,” senators from Iowa and Illinois recently said in a joint statement. “We believe American patients deserve transparency.”
Azar compared the requirement to a similar one that the auto industry has had to comply with for several decades: “We have for over 50 years required that car manufacturers and car dealers post the sticker price of cars on the windows of their cars, and be transparent about that,” he said.
He also added that the new regulation could encourage pharma companies to reduce costs out of concern that consumers would reject products due to the high prices once they are revealed.
Azar, who was a top-level executive with Eli Lilly before joining the Trump administration explains, “If you’re ashamed of your drug prices, change your drug prices,” said “It’s that simple.”
Interested in learning more about the future path of pharmaceutical drugs prices and other key events in the industry? Be sure to stay up to date by attending a pharma convention near you. Register now with us to ensure your place before space is filled.
