Federal proposal to force drug prices in TV ads draws big response from pharma, others

Four pharma companies chimed in among the 146 official comments on the federal government’s plan to tag pharma TV ads with drug prices. Pfizer, Eli Lilly, Sanofi and Johnson & Johnson filed commentary, along with the industry’s leading trade association, PhRMA, during the 60-day period that ended in December.

They were far from alone, as consumers, physicians, healthcare groups, advertising associations, hospital systems, insurance companies and politicians all lined up to share their two cents with the administration. Some of the commenters include AARP, Cleveland Clinic, Cigna, Blue Cross Blue Shield, UPMC, National Association of Broadcasters, George Washington University and CUNY School of Law.

The pharma companies in general agreed that price transparency is beneficial to consumers. Lilly opened its comments by saying it "agrees with CMS that patients would benefit from greater transparency of meaningful drug cost information to help them make decisions about their health care."

However, the pharma companies further agreed that they do not believe simply inserting the list price of the drug in advertising is the best way—or even a good way—to establish real transparency. Instead, they argued, the list price could cause confusion for consumers who usually don’t pay that price and cause them to skip filling a prescription, while potentially also running afoul of First Amendment commercial free speech protections.

PhRMA, which proposed its own set of guidelines for disclosing drug pricing in advertising on the same day the CMS proposal went out, reiterated its stance in its submission, pointing to its guiding principles for direct-to-consumer TV ads to which all its PhRMA members have voluntarily committed. Those will take effect in April.

J&J did add one new idea that cuts across all healthcare players. If list pricing is to be required in ads, other healthcare players involved in drug pricing, including hospitals, health insurers and pharmacy benefit managers, should play by similar rules, the company said.

"So, while one of our products has a list price of about $420 for 30 days, we know that some commercial patients pay around $450 due to pharmacy, distributor, insurance, or other party mark-ups. We suggest that CMS seek to adopt rules to require similar transparency from all parties," J&J’s statement reads in part.

Siding with pharma were advertising associations, media groups and lawyers, while many of the filings from individuals, physicians, health systems and insurance companies were in favor of the idea.

Two prominent politicians also gave their thumbs-up.

Sens. Richard Durbin, D-Illinois, and Chuck Grassley, R-Iowa, filed a joint statement reiterating their support—the two co-sponsored similar Senate legislation this past fall—and added new suggestions. The senators asked CMS for additional points including specific rules to makes sure the list price is "clearly legible and digestible," requiring the ads to document the expiration date of the current list price, and extending the price disclosure rule beyond TV to radio, print, social media and internet ads.

What comes next? Now that the comment period has closed, the ball is in CMS’ court. While some opposition groups have indicated they might file legal challenges, CMS must first make the regulation official.

As for those possible legal actions, HHS Secretary Alex Azar and senior officials have already argued that the measure is constitutional under the Supreme Court’s support of governmental authority to make sure consumers get accurate information. The administration has several times pointed to what it says are comparable products, such as cars, whose makers are legally mandated to reveal list prices.

But that’s a characterization Sanofi disputed in its commentary on the proposal.

"Health is not something that can or should be valued in the same way as other goods. CMS's proposed rule commoditizes drugs, describing their purchase along the same lines as a purchase of ‘a new car, a new house, or even a new coffee maker.’ This oversimplified analogy to commodity products mischaracterizes prescription drugs and biological products as fungible and fails to grasp the nuance and complexity of prescription drugs. CMS's proposed rule inappropriately elevates cost over other attributes of the product," the French drugmaker wrote.