ANA Opposes Mandatory Price Disclosures for DTC Ads

WASHINGTON, D.C. – The Association of National Advertisers (ANA) has joined with other industry groups in strong opposition to a proposed rule from the Department of Health and Human Services (HHS) to require price disclosures in all television ads for DTC pharmaceutical products. The comments of The Advertising Coalition (TAC) argue that the HHS proposal is compelled speech which violates the First Amendment, is seriously misguided and would prove to be counterproductive.

“Prescription drug pricing is an important issue for consumers,” said Dan Jaffe, Group Executive Vice President of Government Relations for ANA. “However, political placebos or ill-considered nostrums such as the HHS proposal are likely to make these problems worse by misleading patients, rather than providing any meaningful cure for these concerns.”

Jaffe noted: “While the proposal is well-intentioned, the mandate for price disclosures in all television DTC ads starts out with three strikes against it: the price disclosures are almost certain to be misleading to consumers; they would be ineffective in meeting the goal of lower prescription drug costs; and they are a form of compelled speech that is prohibited by the First Amendment.”

The industry comments cite an important article by Professors Stacie Dusetzina and Michelle Mello, who reviewed the HHS proposal in the New England Journal of Medicine. They concluded that the proposal “is not a factually accurate representation of what a drug costs for most patients, and the disclosure omits key information. . . (I)t 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.”

Jaffe emphasized: “The proposed rulemaking itself makes clear that a large percentage of consumers will not pay the list price for drugs and that the price variations could be significant. 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 noncontroversial.”

“DTC advertising is already heavily regulated by the Food and Drug Administration (FDA) to assure that it is truthful and nondeceptive. We do not believe the HHS has the statutory authority to impose this price disclosure mandate,” Jaffe noted. “The Supreme Court stated in the Western States Medical Center case that ‘if the First Amendment means anything, it means regulating speech must be a last – not first – resort.’ There are many non-speech related steps the government could take to address prescription drug costs. We hope the HHS will carefully reconsider this proposal and withdraw it.”

Jaffe concluded: “While the target here is the pharmaceutical industry, this proposal would set a very dangerous precedent for a wide range of other products or services that become controversial. Other federal agencies, the Congress or more than 30,000 state and local governments could seek to force marketers to become megaphones for government-imposed speech. For example, we are also actively involved in lawsuits challenging the efforts of two local jurisdictions in California to impose mandatory health disclosures in ads for certain beverages and cell phones. The Supreme Court has established a clear trajectory toward enabling greater protection for commercial speech, not less. We are involved in all of these areas to preserve those rights.”

To learn more about ANA and advertisers’ efforts to defend free speech, visit www.ana.net.

About the ANA:

The ANA (Association of National Advertisers) makes a difference for individuals, brands, and the industry by driving growth, advancing the interests of marketers and promoting and protecting the well-being of the marketing community. Founded in 1910, the ANA provides leadership that advances marketing excellence and shapes the future of the industry. The ANA’s membership includes more than 2,000 companies with 15,000 brands that collectively spend or support more than $400 billion in marketing and advertising annually. The membership is comprised of more than 1,100 client-side marketers and more than 800 marketing solutions provider members, which include leading agencies, law firms, suppliers, consultants and vendors. Further enriching the ecosystem is the work of the nonprofit ANA Educational Foundation (AEF) which has the mission of enhancing the understanding of advertising and marketing within the academic and marketing communities. ANA promotes and protects the First Amendment rights of all marketers by intervening in key legal cases.