DTC Advertising

J&J, Lilly Make Voluntary Moves to Share Broader Price Info in DTC TV Ads

Feb. 11, 2019 – Last week Johnson & Johnson announced that it would include both the list price of a drug and information about what patients realistically might expect to pay out of pocket for its drugs in direct-to-consumer (DTC) ads by the end of the first quarter, starting with Xarelto, its most-prescribed medication. This follows a January announcement by Eli Lilly that its DTC television ads would direct consumers to a new Website or an 800-number where they can learn more about the list price, average out-of-pocket costs and patient assistance programs for its drugs, starting with Trulicity.

These moves by two major drug companies to voluntarily release drug price information come on the heels of two significant events: (1) a Centers for Medicare & Medicaid Services (CMS) proposed rule issued in October 2018 that would mandate that drug companies include the wholesale acquisition cost (WAC), or list price, of their products in DTC TV ads; and (2) the Pharmaceutical Research and Manufacturers of America revised marketing principles, also released in October, under which member companies would refer patients to online information about medicine costs in DTC ads.

The CMS proposal has been criticized in industry comments to the agency in December 2018 as being potentially confusing to consumers – because the list price is rarely the price paid by most patients – and because industry believes that CMS does not have the statutory authority to issue such a mandate, which raises significant First Amendment concerns. Comments to CMS from physicians and patient groups called for expanding the scope of price disclosures to include all DTC ads, and patient groups also addressed the potential problems associated with a lack of context in providing just the WAC.

“The CMS draft proposal is fatally flawed by its reliance on a single and highly misleading metric – the WAC – as the Coalition detailed in our comments,” said Coalition for Healthcare Communication Executive Director Jon Bigelow.

“These recent actions by drug companies to provide more context around the price a typical patient would actually pay represent a better approach to increasing transparency around drug pricing,” he stated. “We hope these constructive actions will lead CMS to either drop its proposal, which raises significant First Amendment legal issues as well as having practical flaws, or at least to modify the final regulation to similarly focus on information that is more realistic and useful to prescribers and patients.”

In a blog post, Lilly Chairman and CEO Dave Ricks noted that the Trulicity ad would be the first to implement the PhRMA principles. “By the end of February we will do the same for other medicines we advertise of TV,” Ricks stated. “And in the months following, we will post this information for our other Lilly medicines, whether we advertise about them or not.”

Scott White, Johnson & Johnson company group chairman, North America Pharmaceuticals, noted in a blog post that the company’s approach to DTC TV ads “builds on our strong support for PhRMA’s revised advertising principles.” He said that the company is starting with its most widely prescribed medicine “so we can assess how the price and cost information is received by a broad range of people.”

On the day the PhRMA principles were released – the same day that the CMS proposed rule was announced, Department of Health and Human Services Secretary Alex Azar said this about the PhRMA proposal:  “We appreciate their effort, but placing information on a website is not the same as putting it right in an ad.”

The comment period for the CMS proposal ended Dec. 17, 2018, just prior to the federal government shutdown. CMS has 149 comments to review before making decisions about any final rule.