Drug pricing transparency in US is way overdue
Drugmakers spend billions selling prescription drugs on TV to the public, sometimes turning a new drug into a blockbuster. You probably know from TV ads that Nexium is the “little purple pill,” that pro golfer Phil Mickelson treats his psoriatic arthritis with Enbrel and that Cialis, a drug for erectile dysfunction, “helps you be ready anytime the moment is right.”
What you don’t know from the commercials is how much these drugs cost — prices that can be staggering. But that could soon change.
On Monday, Health and Human Services Secretary Alex Azar proposed a huge change in drug advertising, requiring that drugmakers disclose the list price of drugs in their TV spots. The proposed transparency is as welcome as it is overdue. Health care is the only consumer commodity where sellers get to hide the price.
Drugmakers have been pitching prescription drugs to consumers for decades, using pleasant music, happy faces, sexy scenes and visuals of people leading better, more fulfilling lives all because they’re taking a prescription drug. There’s also some rushed language in the ads about side effects, in some cases cancer or death. In 2016, drugmakers spent more than $6 billion on this effort.
It’s easy to see why they haven’t bragged about the prices.
The 10 most commonly advertised drugs sport monthly prices ranging from $503 for Eliquis, which is used to prevent strokes and blood clots, to more than $11,000 for Cosentyx, to treat plaque psoriasis and psoriatic arthritis. Now that's information worth having.
Whether the proposed regulation is finalized — the public and drugmakers get to formally comment on the proposal first — depends on the pharmaceutical lobby’s power and the Trump administration’s resolve.
Hours before Azar’s announcement, the Pharmaceutical Research and Manufacturers of America made its first countermove, announcing an alternate plan to publicize prices. It would disclose prices and co-payments of drugs advertised on TV on a new website starting in the spring. PhRMA denounced the government's plan to disclose list prices directly on TV as “confusing, misleading” and not “what patients want or need.”
Azar's response? The sudden volunteer effort was certainly coincidental, he said, adding that “placing information on a website is not the same as putting it right in an ad.” We agree. If companies want to advertise the benefits of their drugs, they ought to reveal the prices at the same time and place.
In fact, that list price is a meaningful number. According to HHS, nearly half of privately insured Americans have policies with high deductibles and pay the list price for prescriptions until the deductibles are met.
Ditto for those with Part D Medicare drug plans. Many co-payments are also based on that price.
Once deductibles are met, patients are spending the insurance company's money on drugs — one reason many people don’t pay much attention to the absurd costs. Perhaps hitting them over the head with those prices on TV will at least make them aware of what’s driving health care costs to astronomical levels.
One thing price transparency isn’t likely to do is bring down prescription prices — one of the administration’s objectives.
Last year, President Donald Trump promised to do so, as he put it, by preventing the big pharmaceutical companies from “getting away with murder.” That’s a worthy goal, but one better handled by giving big buyers more leverage to negotiate prices with drug companies, starting with the federal government’s purchase of Medicare drugs.
Until that happens, the public deserves a taste of reality. And drugmakers deserve whatever blowback comes when the public hears in a TV commercial that a drug, Humira, for example, costs more than $5,800 a month.
Monthly cost: $502.84 Treats: Aid in smoking cessation $174 million