Trump administration rule would require drug prices disclosed in TV ads

BY Michael Hill, Correspondent |

It’s the boldest move yet by the Trump administration to curb prescription costs. The secretary of Health and Human Services has drafted a federal rule that would require pharmaceutical firms to disclose in their TV ads the list prices of many drugs. Health and Human Services Regional Director Anthony Ferreri drilled down on the specifics with Correspondent Michael Hill.

Hill: This is all about the administration, through this policy, lowering prescription prices for consumers. Walk me through how this works.

Ferreri: What we have here is an opportunity, really, that we haven’t had before and that is in the advertising of prescription drugs. We’ve all seen the commercials where you have this drug that brought on the scene, you have people enjoying their life, their daily living, they talk about this particular medication that is effective on this particular ailment or illness. They also follow the commercial with a lot of information, very quick, talking about the effects that it could have, in addition to the efficacy of the drug, the good things about it, the benefits of it. There’s information about the side effects, the risks of taking the drug. So for the first time now, the first time ever, this type of advertising, Secretary Azar, the secretary of Health and Human services, has come out and said we are going to invoke a rule whereby in these TV ads, the manufacturer, the drug company, is required to provide the list price of the medication that they’re advertising.

Hill: And for which drugs are we talking about, and this is through Medicare and Medicaid?

Ferreri: It requires all pharmaceuticals, all drugs, that are sold to Medicare and Medicaid must advertise with their list price listed in the ad.

Hill: When does this start?

Ferreri: Actually, we’re in the middle of a 60-day comment period. At the completion of that 60 days. It just began, but at the end of the 60 days, then there’ll be an assessment of the comments that are made. And then some 30 to 60 days after that, this will be a rule.

Hill: One of the things that the industry says is disclosing the list price of a medication in a television ad would be very confusing, misleading, lacks appropriate context, and isn’t what patients want or need. Prices might deter a patient from seeking medical care.

Ferreri: I tend to think of it, in the old words of Sy Syms, “An educated consumer is our best customer.” So here we have a situation where we want to make the patient an education consumer, so if they have any questions about the price then they can go directly to their insurance provider. They can find out exactly what does this mean, this list price. I don’t think it’s confusing to the patient. I think it’s information to the patient so that that patient can now go to whatever source they have for their medications and say to them, what exactly am I going to pay?

Hill: You’re anticipating a challenge, though, from the pharmaceutical industry on first amendment grounds?

Ferreri: That has been raised, but again, the secretary, the president are doing this under the authority of the Social Security Act, and we truly believe that that authority will see through this whole implementation of these requirements.

Hill: What impact is this going to have on doctor/patient relationships? The patient is sitting there in the doctor’s office. The doctor is weighing whether to prescribe this drug or that drug, and part of the consideration may be price.

Ferreri: Right, so what the doctor himself is also seeing, because doctors aren’t familiar with the list price or the cost of the medication, so now the doctors themselves are watching the very same commercials that their patients are watching. And in many cases, I have it in my own family, someone sees a commercial on television and says this is great for diabetes and it’s better than what you’re using. The patient then runs to the doctor and asks the doctor,does this work better for me, and then the doctor could say they’re pretty much equal in terms of the efficacy of the drug, but now we know the difference in price. One might be $50 a month, the other might be $500 a month.

Hill: Is it your hope that this will spread throughout the industry, not just for Medicaid and Medicare, as well?

Ferreri: Well, that’s what interesting about all this because if you’re using the authority of the Social Security Act under Medicare and Medicaid, the same drugs are being sold directly to patients, the same drugs are being sold through your third party health insurance carrier. So by forcing the issue on the basis of the Social Security Act, drugs sold to Medicare and Medicaid, those same drugs are also being sold directly to the consumer, so it’s already spread out.