DTC Advertising

CHC Cites Practical, Legal Concerns in Comment to CMS on Drug Prices in DTC Ads

Dec. 17, 2018 – The Coalition for Healthcare Communication (CHC) finds the recent proposal to require drug list prices in direct-to-consumer (DTC) television ads “detrimental to the interests of both health providers and patients,” and raises numerous practical and legal concerns to support that position in its official comment filed Dec. 14 with the Centers for Medicare and Medicaid Services (CMS). Comments to the agency were due today.

CHC states in the comment 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.” Indeed, the organization believes that the CMS proposal to include the wholesale acquisition cost (WAC) in pharmaceutical advertising “fails that standard of accuracy.”

The CHC lists the following practical concerns in its comment:

  • Although including the WAC of a drug in a television commercial is proposed as a way of promoting the transparency of drug pricing, under current circumstances it actually does NOT aid transparency. The CHC states that when used as the single metric for the cost of a drug to a patient, “the WAC is highly misleading” and cites examples from a recent “Perspectives” article in the New England Journal of Medicine which compare the WAC of certain drugs and the range of prices actually paid by Medicare beneficiaries.
  • To include the WAC in a television ad as though that is the price commonly paid by the patient is, in fact, inaccurate and misleading, undermining the stated goal of both the FDA and the pharmaceutical industry. According to the CHC, the CMS proposal would “require manufacturers and their advertising agencies to knowingly include in an advertisement information that is at best misleading, and at worse totally inaccurate.”
  • The Department of Health and Human Services says the measure is intended to lower drug prices, but the proposal to include WAC in television advertising will not be effective in doing so. “The proposal targets relatively few products,” the comment states, and the prescriber still vets which drug a consumer receives. Also, in the complex drug pricing ecosystem, many other factors affect a company’s decision to lower the WAC.
  • To provide a misleading list price is potentially harmful to patients. “There is a real risk that if a television advertisement states a WAC as though it is a reasonable approximation of the price of the drug to the patient, without appropriate context as to what a typical patient would actually be likely to pay, it may simply dissuade the patient from seeking medical care or advice,” the comment states.
  • The current proposed rule does not offer patients the information they say they need. The CHC states that “the information that would be provided under this proposal – the WAC – would not be very useful because it does not provide a true picture of a drug’s cost to them.”
  • The proposal to arbitrarily insert the WAC — a single metric that does not represent actual cost to a typical patient – into television ads contradicts the important work now underway by industry and the FDA to make DTC advertising simpler and clearer to patients. According to CHC, “the current proposal will instead complicate the messages” in a TV ad and “introduce information that is known, in advance, to be misleading and confusing.”

Regarding legal concerns, the CHC reiterates more than 50 years of legal precedent, under the Central Hudson line of cases, that the burden of proof that a regulation meets the requirements of the First Amendment rests with the government – in other words, the government must have a heightened interest in the proposed regulation and demonstrate that the proposal achieves its ends and is no more restrictive than necessary to meet those ends. “The proposed rule simply fails to meet the First Amendment standard on all these counts,” the comment states.

The CHC also notes that laws that compel speech on the basis of content are presumptively invalid under the First Amendment, and points out that this regulation does not propose similar compelled speech obligations on other parties in the healthcare system, such as hospitals. Further, the comment states that a content-based speech regulation “must, under the First Amendment, be narrowly tailored to serve a compelling state interest.” The CHC also notes in this section of its comment that it joins and fully supports the comments filed by The Advertising Coalition regarding this proposed rule.

“At a conference in Washington, D.C., on Dec. 12, I heard HHS Deputy Secretary Eric Hargen indicate that he sees merit in providing further context beyond the list price of a drug,” noted CHC Executive Director Jon Bigelow. “We hope that HHS will withdraw this proposed regulation and consider other alternatives, such as [the Pharmaceutical Research and Manufacturers of America’s) initiative to provide context about more typical prices paid by patients at websites.”