CMS Proposes Requiring WAC Prices to be Included in Pharma TV Ads

Regulatory NewsRegulatory News | 16 October 2018 |  By 

The Centers for Medicare and Medicaid Services (CMS) late Monday unveiled a new proposed rule that would require companies to include wholesale acquisition costs (WAC) in direct-to-consumer television advertisements.

CMS claimed in its proposal that the purpose of this rule is to reduce drug and biologic prices, though some experts have questioned whether the move has enough behind it to actually lower prices, and others questioned if the rulemaking would stand up to a First Amendment legal challenge.

One of the chief concerns among critics is that there is no enforcement mechanism to ensure companies take action and include prices in ads as the proposal only says there will be a public list of the drugs and biological products in violation of this rule.

Another concern raised by trade group PhRMA is that the proposal seeks to use list prices, which may not reflect what consumers actually pay. Earlier Monday, PhRMA unveiled its own plan to require member companies to direct patients to information about costs in ads, including list prices and out-of-pocket expenses, in addition to other context.

But CMS made its case for using list prices, noting a number of factors that make list prices relevant across a variety of drug benefit designs. CMS also made its case for why it should be the agency to deliver this proposed rule – rather than FDA, which regulates prescription drug ads via its Office of Prescription Drug Promotion – noting “broad rule-making authority.”

Another concern raised by critics is that the proposed rule does not lower prices.

Nonprofit Public Citizen said: “Requiring such disclosure would help spotlight pharma’s price gouging, but industry executives are beyond shame. Even with this information, consumers, and to a large extent patients, have limited or no ability to choose an alternative product.”

Democrats, meanwhile – from Sen. Dick Durbin (D-IL) to Rep. Jan Schakowsky (D-IL) – praised the rulemaking from CMS as it mirrors legislation introduced by them.

Senate health committee Chairman Lamar Alexander (R-TN) also noted “strong, bipartisan congressional support for this Trump Administration step to reduce prescription drug prices. The more consumers know about drug prices the more likely those prices are to be lower.”

Medicare and Medicaid Programs; Regulation to Require Drug Pricing Transparency


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