The Price Is Wrong

November 27, 2018

In a period of contentious, partisan, and now divided government the search for potential areas of political and legislative consensus has become significantly more difficult. There is one area, however, which appears to be gaining substantial momentum – a drive to lower prescription drug costs.

President Trump, speaking at the Department of Health and Human Services in October, said “since the day I took office, I have made reducing prescription drug prices one of my legislative priorities.” Nancy Pelosi, the likely next Speaker of the House, right after the midterm elections emphasized that lowering prescription drugs costs “will be one of our first legislative priorities.” Mitch McConnell, the Senate Majority Leader, at about the same time, when asked in a recent press conference about prescription drug pricing, said that “I can’t imagine that won’t be on the agenda.”

Unfortunately the first salvo in this effort was misdirected at forcing mandated price disclosures for a wide range of prescription drug advertising. This effort, while well intentioned, is highly likely to prove counterproductive. 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.

In October Alex Azar, the Secretary of HHS, commenced a 60 day comment period on a proposed rule requiring the mandatory disclosure for list prices of prescription drugs in DTC ads. In a direct critique of this proposal in the November 14, 2018 New England Journal of Medicine Stacie B. Dusetzina and Michelle M. Mello note that “it is impractical to state what patients will actually pay because of variation in insurance design and coverage and the fact that rebates and discounts may not be determined when advertisements are made.” The authors then provide numerous examples demonstrating how the proposed mandated list prices will often be dramatically higher than what a patient would actually have to pay and this could “dissuade patients form seeking care because of the perception that they cannot afford treatment.”

The authors note that these serious and misleading price disparities make it highly unlikely that these governmentally forced disclosures could meet the Supreme Court requirement promulgated in the Zauderer case that mandated ad disclosures be “purely factual and uncontroversial.”

ANA and other members of the advertising community intend to file comments in oppositions to this misguided 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.

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