The Trump’ administration’s proposal Monday to force drugmakers to put list prices in television ads met with a mixed reception, with some lauding it as a small step toward transparency and skeptics questioning if it will actually help to lower drug prices.
The proposed regulation requires drugmakers with products covered under Medicare or Medicaid include list prices in any TV ads. The goal is to get drugmakers to be more transparent about the prices they charge for products.
Patients deserve to know “if the drug company has pushed their prices to abusive levels,” said Health and Human Services Secretary Alex Azar in a speech Monday outlining the proposed rule. “And they deserve to know this every time they see a drug advertised to them on TV.”
If companies refuse to put their prices in ads, then the agency would shame them by putting them on a public list, and could take legal action against them, an administration official said on a call with reporters on Monday.
Some patient advocacy groups questioned whether the added transparency would lead to lower drug prices.
“Even with this information, consumers, and to a large extent patients, have limited or no ability to choose an alternative product,” said Peter Maybarduk, director of the advocacy group Public Citizen’s Access to Medicines Program, in a statement. “This is due to the monopolies our government provides to prescription corporations, in the form of patents and other exclusivities, with virtually no conditions or restraints on abuse.”
The drug pricing reform group Patients for Affordable Drugs said that the administration should prevent drugmakers from deducting TV ads from their taxable income instead of requiring them to put up list prices.
“There is no evidence that providing patients and consumers access to list prices will result in lower prices for prescription drugs,” Executive Director Ben Wakana said in a statement.
Some experts questioned whether the proposal could lead to consumers being scared to get a certain product.
“The challenge will be in how the disclosure is actually worded,” Gerard Anderson, professor at Johns Hopkins Bloomberg School of Public Health, told the Washington Examiner. “The more people think they need to actually pay that price, the more concerned they will be.”
But others were buoyed by the administration’s action.
“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,” said Barbara McAneny, president of the doctor group American Medical Association. “That is a step in the right direction.”
The pro-Obamacare group Families USA also praised the administration’s decision.
“People will be shocked to know how much their drugs really cost,” Executive Director Frederick Isasi said in a statement. “This policy will focus public attention on the abusive prices charged by many pharmaceutical manufacturers.”
However, there remain key questions over how the regulation will be administered.
The Centers for Medicare & Medicaid Services released the proposal instead of the Food and Drug Administration, which has the authority to regulate drug TV ads. Normally the FDA monitors whether TV ads for drugs disclose the full risks or side effects.
But an administration official told reporters on Monday that the FDA can only regulate drugs for safety or effectiveness, and not for price.
The official said that the rule cites the authority for CMS to administer Medicare and Medicaid in a way that minimizes “unreasonable expenditures.”
But one law professor questioned that argument.
“Given that FDA has explicit authority here and CMS’ authority is tied specifically to Medicare/Medicaid, [regulations] that try to regulate marketing more broadly need greater justification,” tweeted Rachel Sachs, an associate law professor at Washington University.
The Pharmaceutical Research and Manufacturers of America did not say on Monday if it will challenge the regulation in court.
[Read: Pharmaceutical lobby rolls out changes to TV ads to head off regulation]
Steve Ubl, the industry group’s president, said in a call with reporters that it was too soon to speculate since the final regulation hadn’t been made. The proposed rule will be the subject of a 90-day comment period.
PhRMA is expected to put up a big fight over the rule. As an alternative, Ubl unveiled an initiative on Monday through which the group’s 33 members agreed to put a link in their ads to a website that details the list prices and the average out-of-pocket costs.
Azar said in his speech that the industry group’s proposal, while a step in the right direction, was severely lacking.
“We will not rely on voluntary action to accomplish our goals — including delivering transparency in other areas,” he said.
