Pharma Counter-Proposes Before Feds Propose Rule On Price Disclosure

The government wants pharmaceutical companies to tell the public how much their drugs cost in their direct-to-consumer television advertising.

The industry wants instead to tell people how they could look it up.

Critics say, “Pharma’s gonna charge what pharma’s gonna charge.”

Lines drawn, a lengthy battle is expected to ensue, and don’t forgo your meds waiting for much to change.

In a statement released yesterday, the Pharmaceutical Research and Manufacturers of America (PhRMA) “announced that major drugmakers would voluntarily include price-related information in television ads by directing consumers to websites where they can find information on list prices and costs,” Stephanie Armour writes for the Wall Street Journal.



Later, in a speech before the National Academy of Medicine, Health and Human Services, secretary Alex Azar laid out the Trump administration’s draft of a new federal rule requiring that drug manufacturers “disclose in [television] ads the list price of a 30-day supply of any drug that is covered through Medicare and Medicaid and costs more than $35 a month,” as Amy Goldstein and Carolyn Y. Johnson report for the Washington Post.

“The agency is taking comment on whether the requirement should go beyond television to include ads in radio, magazines, websites, social-networking sites, and newspapers,” the WSJ’s Armour writes.

“The proposal intensifies a tug of war between the pharmaceutical industry and an HHS secretary who emerged from its ranks and has striven to dispel any perception of alignment with his former drugmaker colleagues. The draft rule will now be debated through the fall, and its likelihood of becoming an actual requirement will hinge, in large part, on the intensity of the industry’s resistance,” WaPo’s Goldstein and Johnson add.

Azar was president of the U.S. division of Eli Lilly from 2012 to 2017.

“Azar said it was no coincidence that PhRMA announced the initiative Monday. They knew the Trump administration was getting ready to act, he said,” writes Maggie Fox for NBC News.

“We appreciate their effort. But placing information on a website is not the same as putting it right in an ad,” Azar said. “For too long, drug pricing has been like no other market. We will not wait for an industry with so many conflicting and perverse incentives to reform itself.”

“The drug industry is more or less promising -- without threatening explicitly -- to sue the Trump administration if it moves ahead with its plans to require the outright disclosure of list prices in TV ads,” Dylan Scott writes for VoxCare.

“According to the government, the list prices for the top 10 prescription medicines advertised on TV range from $535 to $11,000 for a month or course of treatment,” the AP’s Linda A. Johnson writes in Time.

“The story of the Trump administration and Big Pharma has, so far, been mostly one of a successful courtship: Trump came into office using the most heated rhetoric imaginable, but his administration has mostly stuck to smaller, and sometimes smart, policies to try to contain drug costs. The industry has been forced to swallow some things it doesn’t like, but it has certainly seen some wins too (and the big Republican corporate tax cut didn’t hurt),” VoxCare’s Scott continues.

Meanwhile, there’s a school of thinking that says disclosing prices is all a bunch of hoopla that will have no actual impact on the marketplace.

“Dale Cooke, a consultant who works with drug companies trying to meet the Food and Drug Administration's requirements for advertising, warned there is no reason to believe posting prices would help drive down prices,” write Kaiser Health News' Shefali Luthra and Sarah Jane Tribble for NPR.

“No one has ever explained to me why this would work,” Cooke says. “What's the mechanism by which this results in lower drug prices?”

Such a policy could actually confuse patients, Cooke maintains. “Consumers, intimidated and confused by high list prices, may be deterred from contacting their physicians about drugs or medical conditions,” he says, as quoted by Luthra and Tribble.

Indeed, “if approved, the proposed rule has no government enforcement mechanism that would force the companies to comply. Rather, it depends on shaming, noting that federal regulators would post a list of companies violating the rule. It would depend on the private sector to police itself with litigation,” write Luthra and Tribble.

“It is noteworthy that the government is unwilling to take enforcement action,” Rachel Sachs, an associate professor of law at Washington University at St. Louis and expert in drug-pricing regulation, tells them.

“It will take many months if not years for this regulation to be implemented and free from the cloud of litigation that will follow it. And the administration knows that,” Sachs says. 

But, speaking of timing, Luthra and Tribble point out that “the Trump administration’s proposal comes weeks before midterm elections in which health care is a top voter concern.” Not that looking like you’re doing something would have anything to do with it, but the measure does have broad bipartisan support, according to several accounts.

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