WASHINGTON — Dozens of pharmaceutical companies have pledged that their upcoming television advertisements will direct viewers to more information about how much a drug might cost, such as a page on a company website, PhRMA president Steven Ubl announced Monday.
The trade group is not requiring its members to include actual list prices in their advertisements, a policy idea that Trump administration officials first floated in May.
“Our member companies’ [direct-to-consumer] TV advertisements will soon direct patients to information about medicine cost to help them make more informed health care decisions,” Ubl said. He added that “this will include the list price of the medicines, as well as an estimate or range of potential out-of-pocket costs and available patient assistance.”
The announcement appears to be an effort to preempt the Trump administration’s plans to force drug companies to include specific price information directly in their advertisements. HHS Secretary Alex Azar is scheduled to deliver a speech at 4 p.m. Monday that will reportedly focus on the same policy idea.
It is clearly not enough for Azar. Less than half an hour after PhRMA publicly announced the policy, Azar said “voluntary action” wouldn’t be sufficient.
“The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay,” Azar said in a statement. “So while the pharmaceutical industry’s action today is a small step in the right direction, we will go further and continue to implement the President’s blueprint to deliver new transparency and put American patients first.”
The range of prices companies will disclose could run anywhere from $0 to an amount larger than the list price of the drug. PhRMA spokesman Robert Zirkelbach said that companies themselves will decide specifically what numbers to include, meaning that information on one drug company’s website might not be comparable to another’s. For example, companies with different dosages of the same drug might decide to include the list price of one dosage, or all the dosages.
“For antitrust reasons, we’re not specifying [that] you have to put this exact data point in this exact place for this exact thing,” Zirkelbach told STAT.
The list price of a drug is set by the pharmaceutical company and impacts how much everyone else pays, from the insurer to the pharmacy to the patient. It is generally publicly available information. But often, it is not exactly the amount of money a patient pays for a drug.
Insurers negotiate different discounts off the list price for their patients. A patient’s deductible can also impact how much he or she will pay for a particular drug. Patients without insurance or with a high deductible pay the full price — unless the pharmacy or drug company has a special deal that lowers the price.
The agreement will take effect on April 15, 2019, but Ubl said that companies might start making information available sooner.
PhRMA has sharply criticized the administration’s initial policy idea since it was initially announced, and they reiterated the concerns Monday.
“PhRMA remains concerned that just including list prices in these advertisements is not sufficient and could discourage patients from seeking needed medical care,” the organization wrote in a press release. “List prices are not a good indicator of what a patient will pay at the pharmacy counter and do not reflect the substantial discounts and rebates negotiated by insurers and pharmacy benefit managers. In addition, any such requirement would raise significant legal issues, including First Amendment concerns.”
PhRMA’s general counsel, James Stansel, said Monday that any rule the administration might issue requiring cost information to be disclosed would violate the First Amendment.
Ubl said that the group has “had initial dialogue,” with the Food and Drug Administration, which is partly responsible for regulating direct-to-consumer drug advertising.
FDA Commissioner Scott Gottlieb told STAT in May that an FDA working group would consider what information they might require companies to include in advertisements. On Monday, an FDA spokesperson did not respond to a request for comment on what had transpired since then.
NOTE: This story originally stated that PhRMA spokesperson Robert Zirkelbach said that individual companies will determine what the “list price” means. He did say that during a call with reporters. After the story was published, he clarified that the “list price” refers to the “wholesale acquisition cost,” the industry-standard publicly reported price.