DTC Advertising

Oregon Considers Drug Price Disclosures in All Consumer Ads

Feb. 25, 2019 – Even as the Centers for Medicare & Medicaid Services considers comments received on a federal proposal to mandate the inclusion of the wholesale acquisition cost (WAC) of prescription drugs in consumer television ads, the state of Oregon is weighing whether or not to require a disclosure regarding the wholesale cost that pharmacies located in the state pay for prescription drugs in all drug ads, regardless of medium.

Oregon House Bill (HB) 2961 calls for manufacturers to disclose the wholesale price of a drug in ads in “newspaper, radio, television or other print, broadcast or electronic media for the purpose of creating interest in or selling the prescription drug” and would impose a civil penalty of up to $5,000 per advertisement on manufacturers failing to comply with the requirement. On Feb. 21 the Oregon House Committee on Health Care held a public hearing to accept comments and testimony on this bill and three others related to pharmaceuticals; no further action has been scheduled for HB 2961 at this time.

“The Coalition acted quickly to submit comments to all members of the health care committee ahead of the hearing, outlining the practical and legal issues with a bill requiring that a single metric, wholesale price, be included in direct-to-consumer [DTC] advertising without any context,” said Coalition for Healthcare Communication Executive Director Jon Bigelow. “The situation in Oregon is an important reminder of why the Coalition, on behalf of the health communications industry, monitors proposed regulations in the states as well as at the federal level. State legislatures, too, can enact legislation that may impede the flow of accurate and credible health information.”

The Coalition’s comment pointed out that the wholesale price pharmacies pay does not represent the price the great majority of consumers would actually pay, taking into account insurance plans, formularies, rebates to PBMs, copays, deductibles, patient assistance programs, and other factors.

The Coalition states that it is “not opposed to the inclusion of drug prices in advertising per se, but when provided, cost information – just like information on efficacy or safety – must be presented in a manner that is accurate and not misleading.” According to the Coalition, “we believe that HB 2961 fails that standard of accuracy. In fact, the requirement to include the wholesale cost of a drug in DTC advertising would be detrimental to the interests of both health providers and patients.”

The Coalition closed its comment by stating that although promoting transparency of medical costs, including drug costs, is part of the goal to help providers and patients understand their therapeutic choices while giving them access to lifesaving and life-changing medications, “we need to ensure that the information in DTC advertising is conveyed in a manner through which it can be most successful in achieving the goal, and does not inadvertently create unintended outcomes.”

Despite Oregon’s concern that prescription drug spending in the state increased by 7.2 percent annually from 1991 to 2014, the Pharmaceutical Research and Manufacturers of America (PhRMA) said in its comment that “the notion that spending on medicines is the primary driver of health care cost growth is false, and this misconception ignores the cost savings that medicines provide to the health care system overall.” PhRMA noted that requiring the wholesale price to be included in ads could cause confusion and treatment delays for patients.

PhRMA also asserted that the pharmaceutical industry is “proactively and meaningfully providing more information to consumers” through the revised marketing principles it released in October 2018, under which member companies would refer patients to online information about medicine costs in DTC ads.

The Biotechnology Innovation Organization (BIO) also submitted a comment on HB 2961 stating that it “respectfully opposes” the bill, which it said “would not provide most consumers with meaningful information.” BIO also “believes this bill attempts an unlawful regulation of commercial free speech,” a point that was raised in the Coalition and PhRMA comments as well.

In its comment, the Association of National Advertisers (ANA) contends that it believes “that [HB 2961] violates both the First Amendment and the Interstate Commerce clause of the U.S. Constitution.” Specifically, the ANA states that although much of the consumer advertising for prescription drugs is placed in media outside of Oregon, HB 2961 “would impose a state-specific disclosure which gives rise to our interstate commerce concerns” and, as such, “would impose significant costs and restrictions on pharmaceutical companies that use national and regional media to communicate with consumers in Oregon.”