Drug prices in ads run risk of confusing patients

May 13, 2019

A new government rule requiring pharma makers to disclose drug prices in television ads will likely create more confusion for consumers, analysts and organizations said.

A new government rule requiring pharma makers to disclose drug prices in television ads will likely create more confusion for consumers, analysts and organizations said.

Last week, HHS Secretary Alex Azar announced the final rule from CMS, which requires direct-to-consumer television advertisements for prescription drugs covered by Medicare or Medicaid to include the Wholesale Acquisition Cost-if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy.

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“Patients have the right to know the prices of healthcare services, and CMS is serious about empowering patients with this information across-the-board,” said CMS Administrator Seema Verma in a statement from HHS. “Today’s final rule is an important step toward achieving President Trump’s vision for lowering prescription drug prices by bringing much-needed pricing transparency to the convoluted market for prescription drugs.

However, several organizations and analysts criticized the new rule.

“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,” said Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Stephen J. Ubl in a statement.

“While we are still reviewing the administration’s rule, we believe there are operational challenges, particularly the 60-day implementation timeframe, and think the final rule raises First Amendment and statutory concerns,” PhRMA added.

While PhRMA supports providing patients with more transparency about medicine costs, the organization believes another avenue is better. Its member companies already voluntarily patients to links to comprehensive cost information in their TV ads. “After speaking with patients across the country, we learned that patients prefer this approach,” Ubl said.

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PhRMA also launched of a new platform for patients, caregivers, and healthcare providers called the Medicine Assistance Tool, or MAT. This tool links to the websites referenced in company DTC television advertising and includes a search tool to help patients connect to financial assistance programs.

James Mather, senior pharma analyst at GlobalData, a data and analytics company, also expressed concerns about the new policy.

A drug’s list price does not translate directly into the ‘true’ price of a drug, Mather said in a GlobalData press release. “Drug makers often bundle their brands together when negotiating, meaning the individual drug list prices can be almost meaningless in these cases,” he said.

Primary research conducted by GlobalData suggests that a pharmaceutical company with a diverse portfolio in a therapy area significantly improves its ability to negotiate with payers. “Therefore, the introduction of list prices to TV adverts will instead provide false representation of the copayment a patient will make, as this is heavily dependent on their insurers negotiations with pharmaceutical companies,” Mather said.

Read more: Inside Trump’s plan to lower drug prices