Pharma, Policy

Drugmakers propose pricing information in DTC ads, but Trump administration says it’s not enough

The industry’s main lobbying group, PhRMA, updated its direct-to-consumer ad guidelines to include pricing information, but HHS secretary says voluntary action is insufficient.

Money pile and medicine pills representing medical expenses

The US is one of only two countries in the world – the other is New Zealand – where direct-to-consumer drug advertising is allowed. But in addition to being a reason why digital video recorders were invented and occasional fodder for stand-up comedians, DTC ads will soon also become the avenue through which drugmakers inform consumers about the prices of their products.

The Pharmaceutical Research and Manufacturers of America, or PhRMA – the drug industry’s main lobbying and trade organization – said Monday its board of directors decided to update its “Guiding Principles on Direct-to-Consumer Advertisements About Prescription Medicines” guidelines to urge members to include provide information about drug costs. The guidelines – which are voluntary for member companies to follow – suggest directing consumers to information sources such as company-developed websites that include information about list prices, out-of-pocket costs and other contextual information.

Inclusion of list prices in DTC advertising – in particular calling on the Food and Drug Administration to evaluate their inclusion in ads – is among the proposals for tackling high drug prices in the Trump administration’s “American Patients First” blueprint for lowering drug costs. Following the PhRMA announcement, Secretary of Health and Human Services Alex Azar said in a brief statement that the industry’s move was welcome, but insufficient.

“Our vision for a new, more transparent drug-pricing system does not rely on voluntary action,” he said in a statement. “The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay.” While adding it was a “small step in the right direction,” Azar suggested the administration plans to go further.

The administration has frequently criticized the pharmaceutical industry over drug prices and proposed policies for reining them in, but its proposals have attracted skepticism. For example, Azar said in August that it had the ability to crack down on rebate deals between pharmacy benefit managers and drugmakers, but legal experts said there is little the administration can do on its own despite agreeing that the rebates are problematic. In July, when Trump excoriated Pfizer and the industry over a report in the Financial Times that the New York-based company had raised prices on a number of its drugs, physician and frequent administration critic Eugene Gu pointed out that prices of insulin products rose dramatically while Azar served as an executive at Indianapolis-based Eli Lilly & Co.

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