WASHINGTON — It’s official: The Trump administration will begin requiring drug makers to include their sticker prices in TV ads — and those updates could hit the airwaves as soon as this summer.
The administration on Tuesday finalized the controversial proposal, which top health officials first outlined back in May of last year. It is set to take effect in about two months and will apply to any drugs that cost more than $35 for a month’s supply.
“We are telling drug companies today: You’ve got to level with people [about] what your drugs cost,” Health and Human Services Secretary Alex Azar told reporters Wednesday. “Put it in the TV ads. Patients have a right to know, and if you’re ashamed of your drug prices, change your drug prices. It’s that simple.”
The idea has drawn ire from drug makers, which are likely to challenge the policy in court. Nonetheless, the Trump administration stuck to its guns and left the proposal largely unchanged from the draft proposal it released in October.
The drug industry trade group PhRMA has insisted that forcing drug makers to disclose their prices in TV ads would violate their First Amendment rights. Instead, drug makers began in April including a weblink in their TV ads directing consumers to detailed pricing information.
Azar said Wednesday that drug makers that choose to follow PhRMA’s proposal and only include a link to pricing information would not be complying with the rule. He told STAT that PhRMA’s proposal is “not acceptable.”
“They put $4 billion a year into television advertising because the television ad is where people are getting their information, and to point them to the internet would be the equivalent of saying that they should simply be putting their ads on the internet and not running them on TV,” Azar added.
However, HHS can’t force drug makers to comply with the regulation. Instead, it’s depending on drug makers to sue each other over so-called deceptive trade practices to enforce the rule. Azar insisted Wednesday that depending on drug makers to sue each other is a “quite effective mechanism of enforcement.”
One large drug maker, Johnson & Johnson, has already broken from PhRMA’s voluntary approach and begun including list prices in TV ads. J&J already includes, for example, a $448 list price in its ads for the blood thinner Xarelto.
A spokesman for J&J insisted that the company had not broken with PhRMA’s approach, but instead strongly supports PhRMA’s approach. They did not respond to a question about whether J&J would sue another drug maker for not disclosing its list prices, as J&J has.
The announcement is also significant because it represents the first big-picture drug pricing proposal that the Trump administration has finalized. Many of Trump’s other splashy proposals, like eliminating the drug rebates negotiated by middlemen, are still in draft form; his idea to peg what Medicare pays for drugs to what other countries pay hasn’t even been formally proposed.
“Today’s final rule is an important step toward achieving President Trump’s vision for lowering prescription drug prices by bringing much-needed pricing transparency to the convoluted market for prescription drugs,” CMS Administrator Seema Verma said in a press release. “Equipped with information on prescription drug prices, patients will be better able to make informed decisions and demand value from pharmaceutical companies.”