Drug firms may soon need to disclose cost

Pharmaceutical industry expected to fight proposed rule

WASHINGTON >> The nation’s top health official proposed on Monday that pharmaceutical companies be required to include the list price of medicines in advertisements to consumers — the boldest element of a series of efforts by the Trump administration to curb drug spending.

Under a major change laid out by Health and Human Services Secretary Alex Azar and drafted as a new federal rule, drug manufacturers would need 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.

“Sometimes it takes government to make the first move, to disrupt a broken system, and to lay down new rules of the road,” Azar, typically an advocate of market-based approaches, said in a speech Monday before the National Academy of Medicine

The shift, which will now become fodder for months of debate before the proposed rule change takes final form, intensifies a tug-of-war between the pharmaceutical industry and an HHS secretary who emerged from its ranks and has strived to dispel any perception of alignment with his former drugmaker colleagues.

The proposed regulation is the latest effort by the Trump administration and some members of Congress to to compel drug companies to disclose the list prices of medicines in television ads — a strategy that would test proponents’ premise that consumers would become more price sensitive, in turn slowing the rise in pharmaceutical charges that have been a main driver in recent years of the United State’s uncommonly high health-care spending.

Hours before the HHS secretary’s speech before the National Academy of Medicine, the major pharmaceutical lobbying group announced a new voluntary action that would, instead, direct consumers to company websites with pricing information.

The announcement by PhRMA, the Pharmaceutical Research and Manufacturers of America, was seen by experts as an attempt to fend off more aggressive federal regulation. Azar released a statement before his speech, saying that “the drug industry remains resistant to

providing real transparency around their prices” and that the government needed to go beyond what he called a “small step in the right direction” by the industry

The industry has also faced pressure from Congress. A bipartisan proposal that would have required drug prices to be included in TV ads passed the Senate but was removed from a House appropriations bill last month.

The voluntary action by the industry, which will go into place by April 15, would give patients a variety of pricing information, including the list price of a drug, the expected out-of-pocket costs of the drug and the patient assistance programs available.

Steve Ubl, president of PhRMA, argued that disclosing only the list price of a medication in a television ad would be “very confusing, misleading, lacks appropriate context and isn’t what patients want or need.” He predicted that the price, which wouldn’t reflect what most people would pay, might deter patients

from seeking medical care, because patient’s out-of-pocket costs vary depending on their insurance plans.

Rachel Sachs, an associate professor of law at Washington University in St. Louis School of Law, said that it is unclear how or why the disclosure of prices in ads would reduce drug prices.

“With that aside, what PhRMA is doing here is obviously an attempt to preempt some of the public concern,” Sachs said. “Realistically, how many patients are going to the website? And if they do go, the additional pieces of information could be even more confusing.”