DTC Advertising

Despite Industry’s Price Transparency Initiatives, CMS Pushes Proposed Rule Forward

April 8, 2019 – The first television ads including drug price information are hitting the airwaves, reinforcing the point that list price is a highly misleading metric, and Pharmaceutical Research and Manufacturers of America (PhRMA) members are preparing to voluntarily refer consumers to online drug pricing information in their drug ads within a few weeks. However, the Centers for Medicare & Medicaid Services continues to pursue a regulation to mandate that all televised direct-to-consumer (DTC) ads include a drug’s list price.

“It’s regrettable that CMS appears to be moving forward with its regulation despite the many practical and legal problems highlighted by the 146 submitted comments, including the Coalition’s,” stated Jon Bigelow, executive director of the Coalition for Healthcare Communication.

One of those practical problems is that the list price does not reflect what most patients pay for a drug. An April 1 Johnson & Johnson ad for the anticoagulant Xarelto was the first drug ad to include the product’s list price ($448), but it went beyond the proposed regulation by also noting typical out-of-pocket costs for the drug – from zero to $47 out-of-pocket, which it says represents the cost to three-quarters of patients for 12-month therapy, and referring patients to a website where they can get more information.

J&J, which is a member of PhRMA, also is on board with PhRMA’s revised marketing principles – announced the same day as the CMS proposed rule – under which member companies would refer patients to online information about medicine costs in DTC ads. Eli Lilly, also a PhRMA member, has been including links to a dedicated pricing website since January.

Another practical concern about the proposed is that if drug ads feature a list price that is inaccurate and misleading, rather than showing what a typical patient pays, it may deter consumers from having important conversations they should have with healthcare professionals about potential diagnoses and therapies.

A very important part of the J&J initiative, Bigelow stated, is that “they then will assess how the price and cost information ‘is received by a broad range of consumers’ so that the format of messaging can be improved. We believe that before CMS imposes any formal regulation, the FDA should vet the impact of the CMS proposal, just as the FDA Office of Prescription Drug Promotion conducts social sciences research on how other parts of a DTC message, such as the presentation of numerical comparisons or the listings of potential adverse reactions, are best understood by consumers.”

It was recently reported that the Office of Management and Budget has received for review the CMS proposed regulation to require that the list price of a drug be included in DTC TV ads.  Bigelow believes that the solutions initiated by PhRMA and J&J “offer a better model, giving consumers meaningful context around what they actually are likely to pay for a prescription drug rather than a highly-misleading list price. In short, the industry has responded to the CMS challenge with better solutions.”