DTC Advertising

Patients: DTC Ad Drug Price Transparency Proposed Rule Needs More Context, Expanded Scope

Feb. 5, 2019 – Patient and disease advocacy groups have weighed in on the Centers for Medicare & Medicaid Services (CMS) proposal to require that drug companies list the wholesale acquisition cost (WAC) for their drugs in televised direct-to-consumer (DTC) ads. Their comments to CMS raise issues about whether the proposed rule asks for disclosure of the right information, if it could result in under-treatment of disease, and how it would affect competition and prices.

Addressing CMS’ assertions that the WAC, or list price, is the right metric to include in DTC TV ads for prescription drugs, The AIDS Institute states in its comment that because the list price is rarely what a patient actually pays for a drug, including only the list price “will not be helpful to patients as they seek access to prescription drugs, and can actually be harmful to their individual health as well as the public health.”

The National Alliance on Mental Illness (NAMI) told CMS that hearing the list price of a given drug may cause people to “easily assume that a medicine is out of their reach and avoid seeking care or engaging in an important conversation with their doctor.” According to NAMI, such an outcome “is an alarming, but realistic scenario that could result from this proposed policy.”

Instead, The AIDS Institute recommends that manufacturers provide information to patients in their ads that “indicate where patients can learn more about the list price of the drug, along with how much they will pay for the drug.” This recommendation mirrors the approach that the Pharmaceutical Research and Manufacturers of America (PhRMA) is taking in its voluntary program, “Guiding Principles on Direct-to-Consumer Advertisements About Prescription Medicines,” which instructs members to provide greater information on drug prices than CMS calls for — not only the list price, but also data on expected or average out-of-pocket costs, as well as available patient assistance programs.

Without this additional information and context, The AIDS Institute is concerned that individuals will be confused about drug costs and possibly may not pursue treatment. “For people with or at risk of HIV, or who are living with hepatitis C, not taking their drugs can be dangerous to their health, and since both HIV and hepatitis C are infectious diseases, [can be] dangerous to the public health … and actually increase new infections,” the comment states.

Several comments say that the scope of the proposal should be expanded to all drugs and all media formats, including digital media. The National Psoriasis Foundation states in its comment that in 2017, digital ad spending reached $208 billion globally, surpassing TV spending by about $30 billion. “By only focusing this rule on TV ads, drug manufacturers may share inconsistent information across different mediums or provide only certain consumers with this information,” the NFP comment asserts.

The AARP comment also calls for an expansion of the proposal to other media, claiming that “limiting this requirement to television advertisements could simply encourage manufacturers to focus their DTC advertising resources elsewhere.”

The Treatment Action Group (TAG) states in its comment that publishing WAC pricing alone does not provide  sufficient transparency and asks CMS to consider requiring drug companies to include drug development costs and the sources of research funding. The group claims that if a public grant has funded a drug’s research and then the company charges a high price for that drug (citing high development costs), “taxpayers end up paying those costs twice.”

“Requiring companies to publish their development costs, instead of or in addition to advertising their list prices, would draw necessary attention to each company’s profit margin and the unreasonably high prices for most prescription medications in the U.S. marketplace,” according to AARP, which also would like to see stronger enforcement mechanisms and “more definitive research on the effects of DTC advertising to determine whether the potential benefits outweigh its potential harms.”

TAG encourages other reforms, such as holding companies accountable for price increases through government action, such as providing clear guidelines and limits for determining list prices and price increases and possibly imposing other price controls.  The proposed rule “would only be effective if implemented in tandem with other policies that build the federal government’s negotiating power and establish price controls to lower the cost of prescription drugs,” TAG concludes.

Patients for Affordable Drugs does not believe that drug companies will be moved to lower prices as a result of the proposal. “Drug companies have been shamed about their price increases for years and appear being comfortable being shamed all the way to the bank,” the group’s comment states. As such, the group calls on the federal government to also eliminate the tax deduction for DTC prescription drug ads.

A comment from the Cancer Support Community (CSC) states that CMS should consider moving toward transparency in the entire healthcare system, including not only drug costs, “but the costs of various treatment options (such as surgery and radiation in the case of oncology), the costs to obtain services at particular locations (such as large medical centers, community clinics, emergency centers, etc.), and the range of related expenses (such as transportation, supportive care, durable medical equipment, etc.).

The comments from all entities – industry, physician groups, patient groups and others – currently are under review by CMS.