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Regulatory Focus™ > News Articles > 8 > Drug Prices in Ads: Senate Passes Amendment

Drug Prices in Ads: Senate Passes Amendment

Posted 24 August 2018 | By Zachary Brennan 

Drug Prices in Ads: Senate Passes Amendment

The Senate spending bill passed Thursday and with it an amendment from Sens. Richard Durbin (D-IL) and Chuck Grassley (R-IA) to require prescription drug advertisements to include prices.

The move, part of an effort to shine a light on pharmaceutical companies’ high drug prices, provides the US Department of Health and Human Services (HHS) with $1 million to implement rules requiring pharmaceutical companies to list prices of their prescription drugs in direct-to-consumer (DTC) advertisements.

Last year, the pharmaceutical industry spent more than $6 billion in DTC advertisements, and the average American sees nine DTC prescription drug ads each day, according to Grassley. The text of the amendment reads: “A drug that is advertised to consumers without the information required by this section or its implementing regulations shall be deemed to be misbranded.”

Durbin, who noted pharmaceutical companies were the only ones opposed to the amendment, said in a statement: “What Senator Grassley and I wanted to do is to give the American people more information about drug costs. More information gives transparency to the transaction, and will help give American consumers a break and start to slow down the skyrocketing cost of prescription drugs."

But whether the prices in ads will further enrage or confuse Americans remains to be seen. Similarly, whether companies will decide to advertise different products based on price remains to be seen. The sponsors of the amendment have yet to say whether the ads will use list prices or rebate-reduced prices, but they have linked their amendment to a newly proposed rulemaking on transparency.

Earlier this week, the Centers for Medicare and Medicaid Services (CMS) sent for review a proposed rulemaking, entitled, “Regulation to Require Drug Pricing Transparency” – though the text of the rulemaking has not been made public. CMS currently offers drug spending dashboards, with information on Medicare Part B and D programs as well as Medicaid.

Earlier this month, CMS also announced plans to begin using what’s called step therapy to try to lower the spend on Part B drugs by about 20% in Medicare Advantage plans. The announcements are beginning to add up to a wider effort, including FDA’s generic drug approvals, to bring down the prices of pharmaceuticals. But whether the moves actually bring down prices remains to be seen.

Rachel Sachs, an assistant professor of law at Washington University in St. Louis, told Focus: “Secretary Azar has decried the use of political 'gimmicks' that wouldn’t have an effect on the problem, but the administration has not yet explained publicly how they think including prices in direct-to-consumer advertisements will lead to drug companies choosing to lower their prices.”

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