Rule Requiring Manufacturers Disclose Drug Prices in TV Ads

For years, American patients have suffered under a drug-pricing system that provides generous incentives for innovation, while too often failing to deliver important medications at an affordable cost. We have access to the greatest medicines in the world, but access is meaningless without affordability. To address this issue, in May 2018, President Donald Trump and Health and Human Services (HHS) Secretary Alex Azar released the American Patients First blueprint, a comprehensive plan to bring down prescription drug prices and out-of-pocket costs. Since the launch of the blueprint, the men and women of HHS have been taking action across the department’s programs and authorities to turn the President’s vision into action, and improve the health and well-being of every American.

American patients first This blueprint is a historic plan for bringing down the high price of drugs and reducing out-of-pocket costs for the American consumer
American patients first This blueprint is a historic plan for bringing down the high price of drugs and reducing out-of-pocket costs for the American consumer

HHS Finalizes Rule Requiring Manufacturers Disclose Drug Prices in TV Ads to Increase Drug Pricing Transparency
Less than a year after the release of President Trump’s American Patients First – PDF blueprint, HHS finalizes first rule implementing the blueprint, aimed at increasing transparency for patients and bringing down overall drug costs both for patients and for the Medicare and Medicaid programs.

On Wednesday, Health and Human Services Secretary Alex Azar announced a final rule from the Centers for Medicare & Medicaid Services (CMS) that will require direct-to-consumer television advertisements for prescription pharmaceuticals covered by Medicare or Medicaid to include the list price – the Wholesale Acquisition Cost – if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy.

“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.”

“Patients have the right to know the prices of healthcare services, and CMS is serious about empowering patients with this information across-the-board,” said CMS Administrator Seema Verma. “Today’s final rule is an important step toward achieving President Trump’s vision for lowering prescription drug prices by bringing much-needed pricing transparency to the convoluted market for prescription drugs. Equipped with information on prescription drug prices, patients will be better able to make informed decisions and demand value from pharmaceutical companies.”

In May 2018, President Trump and Secretary Azar introduced the American Patients First – PDF blueprint to bring down prescription drug prices. The blueprint laid out four strategies for solving the problems patients face: boosting competition, enhancing negotiation, creating incentives for lower list prices, and bringing down out-of-pocket costs.

To create better incentives for lower list prices, the blueprint called for HHS to consider requiring the inclusion of list prices in direct-to-consumer advertising. Less than a year later, this final rule has been published to implement the vision laid out in the blueprint.

Up until now, drug companies were required to disclose the major side effects a drug can have—but not the effect that buying the drug could have on your wallet. Patients deserve more transparency, and this Administration is committed to delivering it.

List prices matter to patients, many of whom either pay the list price or prices based on the list price. For the forty-seven percent of Americans who have high-deductible health insurance plans, the price they see in ads essentially is the price they pay, until they meet their deductible. All seniors on Medicare Part D have coinsurance for certain types of drugs, which means their out-of-pocket expenses are calculated as a share of list price. List prices are also what patients pay if a drug is not on their insurance formulary.

President Trump has already done more than any President to lower drug prices for American patients, and HHS will continue to deliver solutions as laid out in the American Patients First – PDF blueprint to improve drug price transparency and inform consumer decision making. HHS is reviewing comments on a number of other proposed rules to fix opaque systems, change perverse incentives, and put American patients first.

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