The Trump administration revealed a list of ideas for lowering drug prices on Friday. One proposal that is getting significant attention is requiring pharmaceutical companies to include drugs’ prices in direct-to-consumer advertising. The transparency measure could generate a public backlash against expensive drugs and pressure manufacturers into lowering prices.
“It’s an interesting idea,” said John Kamp, executive director of the Coalition for Healthcare Communication, via email, adding that it’s “fraught with peril.”
One problem is that such a mandate, which would be enforced by the FDA, might not withstand a legal challenge. It’s unclear whether requiring companies to disclose prices, which is not a safety- or efficacy-related issue, would fall outside the agency’s jurisdiction.
However, the bigger wrinkle is that drug prices are complicated. Trump’s proposal called on the FDA to evaluate the inclusion of list prices, or the out-of-pocket cost an uninsured patient would pay at the pharmacy counter. The catch: most Americans receive significant discounts on these drugs through their insurers. (Payers and employers negotiate with manufacturers for better rates in exchange for access, often paying a fraction of the official list price).
“Mandating list prices might mislead the American public, because list prices are subject to widespread discounting and rebates,” Kamp said.
Wayne Pines, president of healthcare at APCO Worldwide, agrees.
“The prices for many drugs will look exorbitant, and I think there will be concerns from that standpoint,” he says. “The pricing system in this country is complex.”
Trump introduced a range of proposals last Friday, including overhauling the rebates system, pressuring other countries to pay more for medication, and providing more tools so private insurers could negotiate better Medicare rates. However, the speech did not address two key strategies Trump backed as a candidate: allowing the government to directly negotiate Medicare drug prices and enabling consumers to buy prescription drugs from other countries.
Pines doesn’t see the drug-price-disclosure proposal being implemented anytime soon. The government blueprint revealed last week called for the FDA to evaluate the idea, and the agency said it will form a working group that examines “modern approaches” to direct-to-consumer drug advertisements, including requiring drug companies to disclose prices.
Before any action is taken, the FDA would research the proposal and likely “launch an open process to obtain public and industry comment,” Pines said. Considering the agency has yet to disclose when the working group will be formed, “nothing is imminent,” he added.