HHS Mandates Price Disclosures on DTC Drug Ads

Is part of Trump effort to lower cost
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Those drug company TV ads that already need a fast-talker to work in all the disclaimers, will be getting another disclosure mandate, though it can be in text form.

Drug companies will have to disclose the list price to patients for prescription drugs and biological products in their TV (broadcast, cable and satellite) and online ads. That is according to a final rule published by the Department of Health and Human Services, part of the Trump Administration's effort to lower those prices and the first final rule in that effort.

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HHS pointed out that while drug companies have to disclose the "major side effects" a drug can have on a user's health, it is not required to disclose the impact it can have on wallets and purses. That is changing as a way to try an lower drug prices. "It will provide manufacturers with an incentive to reduce their list prices by exposing overly costly drugs to public scrutiny," HHS said.

Specifically, the rule "will require direct-to-consumer television advertisements for prescription drug and biological products covered by Medicare or Medicaid to include the list price – the Wholesale Acquisition Cost – if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy, with the prices updated quarterly."

That is according to a draft copy of the rule, which is scheduled to be published in the Federal Register Friday (May 10). It is scheduled to go into effect 60 days after that publication.

The disclosure must be "conveyed in a legible textual statement at the end of the advertisement, meaning that it is placed appropriately and is presented against a contrasting background for sufficient duration and in a size and style of font that allows the information to be read easily."

HHS points out that the top ten most commonly advertised drugs are priced at anywhere from $488 to $16,938 per month, a fact it says should be disclosed so patients can discuss that price, and their options, with a doctor. 

"Requiring the inclusion of drugs’ list prices in TV ads is the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the healthcare they receive,” said HHS secretary Alex Azar of the rule. “Patients who are struggling with high drug costs are in that position because of the high list prices that drug companies set. Making those prices more transparent is a significant step in President Trump’s efforts to reform our prescription drug markets and put patients in charge of their own healthcare.”

Critics of the proposal argued that HHS was exceeding its authority in restricting advertising and that specific congressional authority was needed. But the agency disagreed, arguing that its "grant of broad rulemaking authority permits regulations that are reasonably related to the purposes of the programs for which rulemaking is authorized."

The White House announced Thursday that the President had "finalized a historic new requirement that drug companies include prices in television advertisements."

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