TV ads to point consumers to price information

WASHINGTON — Under pressure from the White House, the drug industry announced this week that television advertisements for prescription drugs would soon direct viewers to company websites where they can find information on the list prices of medicines and estimates of the typical out-of-pocket costs for patients.

But prices will not appear in the ads themselves.

To require disclosure of list prices in television commercials would be “very confusing and misleading, lack appropriate context and isn’t what patients want or need,” Stephen J. Ubl, president and chief executive of the Pharmaceutical Research and Manufacturers of America (PhRMA), said in announcing the industry’s voluntary action Monday.

Each company will disclose the prices of its advertised products on its own website.

The list price is generally understood to be the sticker price set by a drug manufacturer, before discounts and rebates to middlemen and financial assistance to patients.

Holly Campbell, a spokeswoman for the trade association said, “A given product may have different list prices depending on the dosage of a medicine, and companies will have to determine how to report a list price if this is the case.”

It may therefore be difficult for patients to compare the prices of similar drugs.

Alex Azar, the secretary of health and human services, said: “Our vision for a new, more transparent drug-pricing system does not rely on voluntary action. The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay.”

James Stansel, general counsel for PhRMA, said that any effort by the government to force drugmakers to disclose prices in their ads would be subject to legal challenge.

“If the government is compelling

companies to speak, that violates the First Amendment,” Stansel said.

It is not unusual for drugs now to cost $50,000 or $100,000 a year. Azar said Trump was determined to bring “price transparency” to the market in an effort to stimulate competition and overturn the current convoluted, opaque system in which everyone but the consumer benefits from higher prices.

Drug company executives and some consumer advocates say that the disclosure of list prices in ads, without more information, could perversely discourage patients from considering helpful medicines, especially those with high price tags.

Moreover, the price that patients pay depends on many factors: Do they have insurance? Have they met the deductible? Is the drug on the insurer’s list of preferred medicines?

The 33 member companies in PhRMA voluntarily endorsed a declaration of principle stating, “All direct-to-con- sumer television advertising that identifies a medicine by name should include direction as to where patients can find information about the cost of the medicine, such as a company-developed website, including the list price and average, estimated or typical patient out-of-pocket costs, or other context about the potential cost of the medicine.”

The new policy takes effect April 15, but some companies may include the information in ads before then.