Those ever-present TV ads for prescription drugs will soon carry prices, too, the nation’s top health official said Wednesday, responding to a public outcry for government action to restrain medication costs.
Health and Human Services Secretary Alex Azar said the Trump administration has finalized regulations that will require drug companies to disclose list prices of medications costing more than $35 for a month’s supply.
“What I say to the companies is if you think the cost of your drug will scare people from buying your drugs, then lower your prices,” Azar said. “Transparency for American patients is here.”
Upping the pressure on industry, Azar also said the administration is willing to consider allowing Americans to import lower-priced prescription drugs from abroad if it can be shown to be safe and actually delivers savings to patients.
Prescription pricing disclosure was part of a multilevel blueprint President Donald Trump announced last year to try to lower prescription drug costs. As a candidate, Trump also favored allowing importation from abroad.
The pricing details are expected to appear in text toward the end of commercials, when potential side effects are being disclosed. TV viewers should notice the change later this year, perhaps as early as the summer.
“This is a big step forward for the administration but potentially not providing a decrease on drug prices on the long run,” said Stacie B. Dusetzina, Associate Professor Health Policy at the Vanderbilt University Medical Center. “Telling people what the price is doesn’t change the price. Instead we would need reform to price setting or related to how patient payments are set.”
“The downsides are that you could potentially dissuade people from seeking treatment. For example, if you’re hearing Chantix is nearly $500 for a month of therapy you might not talk to your doctor to quit smoking,” Dusetzina added.
Democrats say measures like price disclosure won’t force drugmakers to lower what they charge, and they want Medicare to negotiate on behalf of consumers.
Other ideas from the Trump administration include regulations affecting Medicare and legislative proposals pending in Congress. With the cost of medicines a top concern for voters, Trump and lawmakers of both major political parties want accomplishments they can point to before the 2020 elections.
The drug industry opposes the price reveal, saying companies would rather provide the information on their websites. But Johnson & Johnson, based in New Brunswick, New Jersey, announced this year that it would start disclosing the cost of its blood thinner Xarelto in TV advertising. That drug is used to treat and prevent blood clots that can cause strokes.
Among drug industry complaints is that the government would be infringing on First Amendment free speech rights by forcing companies to disclose prices. Azar points out that the government has for decades required carmakers to post their sticker prices on vehicles.
“Prices of automobiles are vastly less important to your health and affordability than drugs,” he said.
According to the government, the 10 most commonly advertised drugs have prices ranging from $535 to $11,000 per month or for a usual course of therapy.
The disclosure requirement will not apply to print or radio ads for the foreseeable future. It covers all brand name drugs covered by Medicare and Medicaid, which is nearly all medications.
“Over $4 billion of pharma spend is in TV ads ... that is their most impactful form of advertising,” Azar said. “That is where the patient has the most need of being informed.”
The government is hoping that patients armed with price information will start discussing affordability with their doctors, and gradually that will put pressure on drugmakers to keep costs in check.
In a twist, enforcement of the disclosure rule will rely on drug companies suing each other over violations under a longstanding federal law that governs unfair trade practices. “There are very large legal practices built on pharma companies suing each other,” said Azar, calling it a “quite effective mechanism.”
Most people count on lower cost generic drugs to manage their health problems, but the advent of revolutionary medications for once-fatal or intractable diseases has put consumers on edge. Some genetic and cellular-based treatments can cost hundreds of thousands of dollars a year, which has put a strain on the budgets of insurers and government programs.
A recent poll from the nonpartisan Kaiser Family Foundation found that 1 in 3 Americans said they haven’t taken medications as prescribed because of costs. People who take four or more medications, those who spend $100 a month or more on meds, patients in fair to poor health and middle-aged adults are more likely to report affordability problems.
Although most patients do not pay the full list prices that will be included in ads, experts say those prices are still important. They’re the starting point for negotiations between drugmakers and insurers. Also, copays that patients face are often based on list prices. And many people who have high-deductible insurance plans pay list prices for medications because their insurance doesn’t start covering until patients have spent several thousand dollars of their own money.
Experts like Dusetzina, don't think measures such as drug pricing disclosure on TV ads adequately addresses the drug pricing problem. “I believe it’s a bit of a distraction from real purpose. It’s not going to get us where we want to go with decreasing drug,” she said.
In other economically advanced countries, governments negotiate drug prices to keep medications more affordable for patients. But except for some government programs like the Veterans Affairs health system, the U.S. has held back from government-set prices.
The regulations will take effect 60 days after they’re published in the Federal Register.