Drug companies will publish prices in TV ads
HHS has finalized a rule that will require drug companies to publish the list prices of drugs in television ads. The rule was proposed in October 2018 and is the first to be finalized from President Donald Trump’s American Patients First blueprint, which outlines the administration’s goal to lower drug prices and was released in mid-2018.
The final rule mandates that direct-to-consumer TV advertisements for prescription pharmaceuticals covered by Medicare or Medicaid will include the list price, or the Wholesale Acquisition Cost, which is the cost of the medicine before insurance negotiations and not a price that all people end paying if they have insurance coverage. The price must be published in TV ads is it is equal to or greater than $35 for a month’s supply or the usual course of therapy.
According to CMS, the 10 most commonly advertised drugs have list prices ranging from $488 to $16,938 per month or usual course of therapy.
“Patients have the right to know the prices of healthcare services, and CMS is serious about empowering patients with this information across-the-board,” CMS Administrator Seema Verma said in a statement Tuesday. “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. Equipped with information on prescription drug prices, patients will be better able to make informed decisions and demand value from pharmaceutical companies.”
In anticipation of the rule being finalized, some drug companies, including Johnson & Johnson, already announced they will begin publishing the list prices of drugs in TV ads.
While many people with Medicare drug plans don’t end up paying the list price for certain prescriptions, some do, which is why publishing the list price is important, according to HHS Secretary Alex Azar. The new rule will take effect 60 days after it is published on the Federal Register Friday.
“For the 47 percent of Americans with high-deductible health plans, the price they’ll see in ads essentially is the price, until they hit their deductible,” Azar said in a statement Tuesday. “Other patients, especially when they need expensive drugs, will be responsible for a percentage of the list price, as coinsurance.”
Azar also took issue with the argument that publishing list prices won’t make a difference in lowering drug costs overall.
“Claiming list prices don’t matter is almost the same as claiming there is no problem with high drug costs at all—and I don’t think many American seniors or patients with serious illnesses would say that’s the case,” he said.
View the final rule here.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."