Trump administration will require drug companies to disclose prices in TV ads

by Nathaniel Weixel - 05/08/19 8:52 AM ET

Drug companies will be required to disclose prices in television ads under a Trump administration final rule announced Wednesday.

Under the new policy, which was announced by Health and Human Services (HHS) Secretary Alex Azar, drug manufacturers will have to state the list price of a 30-day supply of any drug that is covered through Medicare and Medicaid and costs at least $35 a month.

{mosads}The new rule is one of the boldest steps the administration has taken in its efforts to bring transparency to the drug pricing system, and puts Trump officials squarely at odds with the drug industry lobby, as well as television and ad industry groups.

“American patients deserve to know the prices of the healthcare they receive,” Azar said in a statement. “Patients who are struggling with high drug costs are in that position because of the high list prices that drug companies set.”

President Trump has made lowering drug prices a priority of his administration, and has called for industry behavior to drastically change.

According to HHS, the 10 most commonly advertised drugs have list prices ranging from $488 to $16,938 per month for a usual course of therapy. Under the rule, companies will be required to post that information in clear, legible text onscreen at the end of the ad.

Under the rule, the agency will publish a list of companies that don’t comply with the policy. Those companies would also be subject to potential litigation.

The idea behind the rule is to make patients better informed, so they can talk about the affordability of their medicines with their doctors. Combined with other administration efforts, manufacturers will be pressured to keep prices lower, Azar told reporters Wednesday.

The drug industry has argued the rule violates their First Amendment rights, and is likely to challenge it in court.

HHS has said they think the rule is on firm legal ground, and Azar said there’s no reason patients should be kept in the dark about the full prices of the products they’re being sold.

“We think it is a fundamental right to know whether that drug they’re being pitched is a $50 or $5,000 drug,” Azar said.

Drug companies have insisted that the rule will confuse consumers, because a drug’s list price is often lower than what the patient will actually pay.

Instead, the deep-pocketed industry group PhRMA wants its members to disclose pricing on separate websites. But Johnson & Johnson earlier this year started airing a commercial that discloses the list price of a widely prescribed blood thinner, Xarelto.

Drug companies spend $4 billion a year in television advertising, so the disclosure requirement will only apply to TV ads for the foreseeable future, Azar said.

Tags Donald Trump Drug prices Pharmaceutical industry Prescription costs