ROBERT KING May 08, 2019
The CMS
on Wednesday finalized a rule that forces drug manufacturers to provide the
list price for their products in direct-to-consumer ads, a policy aimed at
increasing transparency and vehemently opposed by industry.
The new
policy will apply to drugs or biologics with list prices greater than $35 for a
month's supply or the normal course of therapy, which HHS Secretary Azar said
is what consumers would be accustomed to pay because it's close to an insurance
plan's average copay for these drugs.
Azar shot
back at pharmaceutical industry claims that the rule would confuse consumers
because the list price isn't what they pay due to discounts and rebates.
"Claiming
list prices don't matter is almost the same as claiming there is no problem
with high drug costs at all," Azar said during a call with reporters on
the rule.
Drugmakers
will need to more than place a link to pricing information in the ad. The
leading pharma lobbying group Pharmaceutical Research and Manufacturers of
America had called for its members to add a link to more information as a way
to circumvent the need for federal regulation.
"They
put $4 billion a year into TV advertising," Azar said of drug companies.
"To point [consumers] to the internet is the equivalent to saying they
should put their ads on the internet and not on TV."
But the
CMS is relying on drug companies to effectively regulate each other, a break
from how DTC ads are currently regulated.
The Food
and Drug Administration already regulates direct-to-consumer ads and cracks
down on companies that fail to list the side effects among other violations.
However, HHS decided not to send the rule through FDA but rather through the
CMS due to legal reasons.
"We
decided that our authority with the Social Security Act with Medicare and
Medicaid provided the strongest platform and enforcement with the Lanham Act
rather than having FDA inject itself into list pricing considerations,"
Azar said.
The
Lanham Act is a law that governs trademarks and copyrights. It also allows
competitors to sue one another for making false statements in an ad.
"There
are very large legal practices built on pharma companies suing each
other," Azar said.
He added
that the rule, first proposed in October and going into effect in 60
days, will also require drug companies to say that insurance may change the
price.
The
secretary brushed off a question about whether the rule violates First
Amendment rights for drug companies, noting that car dealers are required to
post the sticker price for their cars.
Story developing...
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