Administration's Direct-to-Consumer Advertising Proposal Draws Varied Feedback From Stakeholders

In October 2018, HHS Secretary Alex Azar proposed requiring drug companies to include the list price of a drug paid for by Medicare or Medicaid in direct-to-consumer (DTC) television advertising. Since the rule was announced, it has drawn feedback from stakeholders across the spectrum.

The proposal, for which a comment period recently closed, received more than 140 comments on the Federal Register from payers, providers, patient advocacy groups, and others, varying in support of the proposal to raising concerns.

Voicing support in its submitted comments, America’s Health Insurance Plans (AHIP) explained that, while drugmakers are responsible for the creation of life-saving treatment and breakthrough cures, “too many Americans must choose between paying for their bills and paying for their medications.” For this reason, AHIP supports “bold action” in order to increase access to affordable medications.

AHIP says it “strongly support[s] the disclosure of list prices for brand name drugs and biologics in direct-to-consumer drug advertisements,” and also encourages CMS to consider making compliance with this rule a condition of payment or participation in government health programs such as Medicare or Medicaid.

CVS Health also voiced support of the DTC proposal, saying that pharmaceutical manufacturers spent over $5.2 billion in 2015 on DTC television advertisements, though these ads contained no pricing information for patients or providers. Enacting the proposal “would put important information in the hands of the ultimate consumer: the patient.” Furthermore, CVS Health also supports expanding the pricing disclosures to other forms of media, including print, radio, online advertising, and social media.

The American Medical Association (AMA) echoed CVS Health, stating that it supports requiring pharmaceutical companies to disclose list prices in all advertisements. However, AMA noted that it is concerned that the proposal did not include a “valid enforcement mechanism,” and urges CMS to consider additional enforcement tools to compel compliance.

A number of groups submitted comments largely opposed to enactment of the proposal, however. The Global Healthy Living Foundation (GHLF), a patient advocacy organization that represents chronically ill patients and their caregivers, stated that it “firmly believe[s] that the success of any efforts to reduce drug prices should be measured by the reduction of financial burden on the patients.” Although GHLF supports greater transparency within the US healthcare system, it is concerned that the proposal would do “more harm than good by creating confusion for patients and doing little to lower their out-of-pocket costs.”

Additionally, while the Biotechnology Innovation Organization (BIO) states that it supports providing patients with more clarity about how medicines and other healthcare services are priced, “we believe CMS’ proposed approach—publishing a medicine’s Wholesale Acquisition Cost (WAC) with very minimal contextual information during a brief televised drug advertisement that commonly features the medicines profile, uses, and safety information—does not achieve this goal.” BIO is concerned that, instead of helping patients, the proposal will confuse consumers and potentially cause them to not seek necessary medical care due to “sticker shock” from the price.

Finally, one of the most vocal opponents of the proposed rule is the Pharmaceutical Research and Manufacturers of America (PhRMA). PhRMA emphasized that any cost-related information provided to patients should “actually help patients make informed decisions about their medical care.” In order to accomplish this goal, PhRMA announced that it launched a new platform that will “provide patients, caregivers, and providers with cost and financial assistance information for brand-name medicines, as well as other patient support resources.” The platform will take effect in April 2019, when signatory companies will include “direction as to where patients can find information about the cost of the medicine” in their respective DTC advertisements.

PhRMA also explained that CMS’ proposed rule raises legal concerns. “PhRMA does not believe that CMS has authority to issue the proposed rule under existing law and the separation of powers doctrine.” The organization went on to discuss the various First Amendment concerns it foresees with enactment of the proposal, and has strongly urged CMS to withdraw the proposed rule.

For his part, when announcing the proposal, Azar was firm that HHS will take action. “When we change the rules, the market players will reorganize their businesses to fit the new world. And it will be a very different world for American drug pricing.”