HHS Now Requiring Manufacturers to Disclose Drug Prices in TV Ads

May 8, 2019

Finalized rule is a step toward increasing drug pricing transparency.

CMS will now require direct-to-consumer drug ads for prescription pharmaceuticals covered by Medicare or Medicaid to include the list price if it is greater than or equal to $35 for a 30-day supply or for the usual course of therapy.

Announced by HHS Secretary Alex Azar, the final ruling comes as one of the first implementations of 2018’s 'American Patients First' introduced by Azar and President Trump. The overall goal of the initiatives is to create incentives that will help lower drug list prices for consumers. 

“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. “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.”

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Previously, drug companies were only required to disclose the major side effects of a particular drug. 

According to the Blueprint, the 10 most commonly advertised drugs have list prices ranging from $488 to $16,938 per month or usual course of therapy. Forty-seven percent of Americans have high-deductible health insurance plans, which requires them to pay the list price of a drug until they have spent through their deductible. Medicare Part D plans are also increasingly implementing deductibles, raising the amount of out-of-pocket costs that people must pay for prescription drugs before insurance take over. If a particular drug is not covered by insurance, the person has to pay the list price. 

In response to the HHS rule, the Pharmaceutical Research and Manufacturers of America (PhRMA)-an organization representing the country’s leading innovative biopharmaceutical research companies-also announced the release of a new Medicine Assistance Tool (MAT).  The MAT is an online tool that will provide patients, caregivers, and providers with links to company-developed websites that display a drug’s list price and average estimated or typical patient out-of-pocket costs. Included in the website is a search engine that will connect patients with medicine-specific financial assistance programs and provide patients with resources to better navigate their insurance coverage.

"We are concerned that the administration's rule requiring list prices in direct-to-consumer (DTC) television advertising could be confusing for patients and may discourage them from seeking needed medical care," said PhRMA CEO Steven J. Ubl in a statement. 

In addition to the new rule on drugs, HHS claims that they are also reviewing comments on other proposed rules, which could deliver greater transparency for a range of items and services.