NEJM article, ANA challenge sticker prices in drug ads

In the latest salvos challenging the value of adding drug prices to pharma TV ads, two academics and a well-known advertising association have set out their arguments against the proposal.

The authors of a New England Journal of Medicine article in mid-November and a blog post from the Association of National Advertisers last week agree the government’s push for lower drug prices is a worthy goal, but price tagging drugs won’t help. And like other opponents, the two detractors contend sticker prices in TV ads could confuse consumers, given the convoluted pricing and reimbursement system in the U.S.

The CMS proposal, listed on the federal docket as the "Regulation to Require Drug Pricing Transparency" specifically addressing Medicare and Medicaid covered drugs, is in a 60-day comment period ending Dec. 17. To date, 54 comments have been submitted.

The NEJM authors, one a professor at Stanford and the other at Vanderbilt, posited that one unintended consequence may be dissuading patients from seeking care because the advertised price is out of their budget range. That’s because the list price, also called the wholesale acquisition cost (WAC), is what an uninsured person would expect to pay. The cost would likely be much lower for the majority of insured or Medicare-covered consumers, the authors point out.

As an example, the article cited the anticoagulant drug Eliquis from Pfizer and Bristol-Myers Squibb, which has a list price of $419. Commercially insured patients who use a co-pay card would pay as little at $10 out-of-pocket. Even Medicare beneficiaries in the Part D coverage gap, also known as the "donut hole," would only pay $147, the authors reported.

"Consequently, the proposal carries a risk of undercutting the main public health benefit of direct-to-consumer advertising: reducing rates of undertreatment," said Stacie Dusetzina, Ph.D., at Vanderbilt University and Michelle Mello, Ph.D and J.D., at Stanford Law School. They added that "although CMS will require a statement noting, ‘If you have health insurance that covers drugs, your cost may be different,’ this wording doesn’t communicate that costs to patients are probably much lower than the WAC."

In the ANA post, Dan Jaffe, executive VP of government relations, pointed to a trio of problems with the "misdirected" idea.

"These proposed disclosures start out with three strikes against them. They are almost certain to be misleading to consumers, ineffective in meeting the goal of lowering prescription drug costs, and unconstitutional due to clearly violating First Amendment safeguards," he said.

Consumers, however, broadly support the idea. A Kaiser Family Foundation tracking poll last month found 77% of Americans favor requiring prescription drug ads to include a statement about how much the drug costs.

So the question is, then, if experts believe sticker prices in ads wouldn't be effective, what would? How can consumers’ legitimate demands for price transparency be addressed?

The NEJM authors suggested making patient-specific drug cost information accessible when they're prescribed, possibly through EHRs—and, more simply, by making it a "routine part of prescribing discussions" between patients and doctors. (Although they do acknowledge physician time constraints may be an issue.) In fact, many EHRs do have real-time prescription price information catered to individual health plans. For instance, Surescripts real-time patient-specific benefit tool was added last year by 77% of EHR platforms, including large players like AllScripts, Epic and Cerner.

ANA's Jaffe did not make specific suggestions, but did reiterate his concern about the proposal.

"Prescription drug pricing is an important issue, but political placebos or ill-considered nostrums are highly likely to make these problems worse by misleading patients rather than providing any meaningful cure for these concerns," he wrote.

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