Pharma reacts to finalized tv ad drug pricing rule

May 9, 2019

Earlier this week, the U.S. Department of Health and Human Services announced that list prices for drugs must be included in direct-to-consumer ads.

The rule will apply to any medications with a list price of $35 a month or more and will take effect in 60 days. The policy has been debated for months, facing sharp criticisms from pharma industry stakeholders.

Here are a few industry reactions to the finalized rule:

Pharmaceutical Research and Manufacturers of America (PhRMA)
"We are concerned that the administration’s rule requiring list prices in direct-to-consumer television advertising could be confusing for patients and may discourage them from seeking needed medical care," the group said in a response statement.

To combat confusion, PhRMA announced the launch of a new platform for patients, caregivers and health care providers called the Medicine Assistance Tool (MAT).  This tool links to the websites referenced in company DTC television advertising and includes a search tool to help patients connect to financial assistance programs.

Johnson & Johnson
In a move contrary to the opinions of most of pharma, J&J not only supported the rule, but went ahead and added pricing to its tv ads.

In a statement posted in February of this year, J&J said: 
"When the current Administration’s American Patients First Blueprint issued in May of last year proposed including list price information in direct-to-consumer TV ads, we saw an opportunity to envision – and implement – additional transparency that would enable patients to make more informed decisions."

The drugmaker vowed to begin including information about the cost of medicines in pharmaceutical DTC TV advertising, starting with its most frequently prescribed drug, Xarelto. J&J made good on this promise, launching the Xarelto ad with both the list price and potential patient out-of-pocket costs, in late March.

GlobalData, a data and analytics company, says Trump’s requirement to disclose drug prices will cause confusion not clarity.

James Mather, Senior Pharma Analyst at GlobalData, offered his view:

“At first this appears a logical approach to tackling high drug prices; however, the list price does not translate directly into the ‘true’ price of a drug. Drugmakers often bundle their brands together when negotiating, meaning the individual drug list prices can be almost meaningless in these cases."

“Primary research conducted by GlobalData suggests that a pharmaceutical company with a diverse portfolio in a therapy area significantly improves its ability to negotiate with payers. Therefore, the introduction of list prices to TV adverts will instead provide false representation of the co-payment a patient will make, as this is heavily dependent on their insurers negotiations with pharmaceutical companies."

During the initial 60-day commentary period, which closed in December, Pfizer, Eli Lilly, Sanofi and Johnson & Johnson filed commentary.