DTC Advertising

Many Physician Groups Call for Broader DTC Ad Price Disclosure, Greater Penalties for Violators

Jan. 29, 2019 — Although industry trade groups filing comments on the Centers for Medicare & Medicaid Services (CMS) proposal to require including the wholesale acquisition cost (WAC) in television ads for prescription drugs were largely agreed in their positions against the idea (as reported here), comments from physician organizations and specialty groups were more diverse.

Some worried that including only list prices would be confusing to patients. Many, however, agreed with the concept but argued that the requirement to include list prices should be extended to other media as well as television, that additional information should be provided, and that enforcement penalties should be stronger.

Several of the groups’ comments address the “gatekeeper” role that physicians play in the healthcare system, and how price may complicate that relationship. “It can be difficult for neurologists to determine the medication that is best for a patient’s physical health and best for the patient’s financial well-being,” according to a comment to CMS from the American Academy of Neurology (AAN).

AAN asserts that it “opposes [DTC] pharmaceutical advertising and encourages manufacturers to divert those funds to medical research and development,” but the group also states that the inclusion of the WAC “could be confusing to insured patients who would not be responsible for paying the full WAC price,” and raises its concern that “patients may forgo care out of fear of being responsible for paying inflated WAC prices.”

The American Academy of Family Physicians states in its comment that it believes that DTC advertising of medical products (including prescription drugs) is acceptable when several conditions are met. One of those conditions is that “patients must be provided with clear and accurate cost information on products.”

The American Academy of Dermatology Association’s (AADA’s) comment seeks assurances based on consumer research that “displaying the raw prices of drugs … will not deter patients from seeking treatment.” However, the AADA comments that if the CMS proposal to include the WAC in television ads moves forward, “then media beyond television, including the internet, print media and professional journals should be included for both patient and physician access.”

The American College of Cardiology (ACC) echoes that approach, stating that it supports including drug price transparency ad requirements “in media beyond television.” The ACC also calls for CMS to place an emphasis on value in drug price transparency efforts, “as assessed through scientific evidence and analysis of both comparative effectiveness and cost-effectiveness.” In its comment, the Cleveland Clinic also states that list price disclosure “should not be limited to television but all forms of media,” and that any price disclosures should be both audible and visible.

The American Medical Association (AMA) states in its comment that CMS should consider additional policy proposals to increase prescription drug price and cost transparency, such as: requiring pharmaceutical companies to provide public notice before raising the price of any drug; requiring drug companies to publicly disclose “a variety of information, which could include research and development costs, clinical trial expenditures, total costs incurred in production, and marketing and advertising costs; and providing physicians with “timely, accurate, and complete information on drug formularies and drug utilization management policies at the point-of-care in electronic health records, without imposing additional health information technology costs or burdens on physicians.”

The American College of Obstetricians and Gynecologists (ACOG) agrees that CMS or the Department of Health and Human Services “should create an enhanced drug pricing dashboard and searchable database that include all of the current list prices for pharmaceuticals, both brand and generic, covered by Medicare and Medicaid that patients and physicians can search and that can be integrated into electronic health records.” ACOG also would like to see the additional costs/expenditures named in the AMA comment provided as a part of that database and also is in favor of expanding price transparency reporting requirements beyond television.

Further, the AAN is concerned about the CMS proposal’s “lack of a substantive enforcement mechanism,” and how the list CMS plans to publish will be generated. “The AAN is concerned that the proposed list is merely a shaming tactic rather than a robust mechanism that would lower drug prices,” its comment states. The AADA states that it recommends “more robust enforcement or incentive mechanisms.” The Cleveland Clinic comment remarks that the proposed enforcement mechanism “is entirely insufficient. In other words there is no penalty for violation. We advise CMS to consider financial penalties and/or exclusion from participating in Medicare/Medicaid programs.”

Several of the physician group comments support a drug price counseling reimbursement code, although the ACC’s comment stated its concern “that the creation of a new payment code may create an additional administrative burden and unintentionally reduce the incentive to engage in this necessary patient-clinician discussion.”

As reported here, many industry organizations – including the Coalition for Healthcare Communication –filed comments stating that the CMS proposal would confuse or mislead consumers, that the proposal raises significant First Amendment concerns, and that CMS does not have the statutory authority to impose this mandate. CMS is currently considering the comments, presumably delayed in its analysis by the partial government shutdown that just ended, and has yet to indicate what it plans as a final regulation.