BioPharma, Policy

Senator calls for drug prices in DTC ads, but study shows a potential flaw

The study, published last week, found that high price points didn’t deter consumers when coupled with the potential for financial assistance.

A proposal by the Trump administration to address the high prices of drugs by making drugmakers include list price information in direct-to-consumer advertising received renewed attention in Congress this week. But while a recent study indicates that high list prices can indeed diminish interest in a drug, it also indicated that drugmakers can get around that by promising copay assistance and coupons.

On Tuesday, Sen. Chuck Grassley, R-Iowa, advocated inclusion of list prices in the television commercials for drugs. “I am confident in the ability of Americans to use this information to make the best decision for themselves,” he said in remarks in a hearing on drug pricing.

Some experts have already called the wisdom of that proposal into question, saying that it is more likely to cause confusion, misinformation and oversimplification of how drug pricing actually works than to create consumers well-informed and equipped to make smart decisions about their therapy.

But the new study adds an additional wrinkle, indicating that information about financial assistance may undercut the sticker shock from high prices. The study, published as a research letter last week in the Journal of the American Medical Association, was conducted by researchers at Johns Hopkins University, Clemson University and Brigham Young University.

The researchers recruited 580 participants who were told to assume they recently received diagnoses with Type 2 diabetes. They were presented with five different ads for a fictional drug. One ad included no pricing information, while the others included prices of $50 or $15,500, with or without “modifiers,” which took the form a statement indicating that eligible patients could receive the drug for as little $0 per month.

However, the researchers found that while the higher list price made patients less likely to show interest in a drug, such diminished interest was reversed when they were presented with the change to receive it for nothing. They indicated some potential limitations, including that real patients might behave differently, that results may not be generalizable to drugs in other indications, and that the study did not include clinician responses.

The high prices that many consumers must pay out of pocket for drugs – particularly when they have high-deductible plans or have to take increasingly expensive medicines like insulin – often get the most attention from the public. But high list prices also create significant costs for payers and the healthcare system as a whole, and research on the subject has indicated that copay assistance programs like the hypothetical one in the JAMA study play a role in increasing costs.

In a 2016 paper published in the Annals of Internal Medicine, Dr. Peter Bach of Memorial Sloan Kettering Cancer Center in New York and Dr. Peter Ubel of Duke University listed the ways that copay assistance programs act as a “helping hand” raising drug costs. Copay assistance programs, they wrote, diminish price pressures; undermine benefit designs that allow for low-cost insurance plans; don’t offer as much assistance as they seem to; reduce insurers’ negotiating leverage; and reduce patient scrutiny of costs. The context of that paper was important: It came right after Mylan sparked outrage by increasing the price of EpiPen to $600, but sought to allay that by offering a copay assistance program that took $300 off the price.

The Pharmaceutical Research and Manufacturers of America said in October that it had updated its voluntary DTC advertising guidelines to urge members to include information about drug costs. But one expert said at the time that mandating list prices in ads could scare people out of taking medications they might need while depriving them of contextual information that they need to fully understand drug pricing.

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