23 October 2018
Last week, the Trump administration put it in writing: Under a proposal published in the Federal Register, drugmakers will have to put list prices in their TV ads. So what's next for pharma? Here's what to keep an eye on.
First, the basics: The Trump administration's proposal in the Federal Register formalized HHS Secretary Alex Azar's comments last week. Specifically, the Centers for Medicare and Medicaid Services is seeking to amend Medicare and Medicaid programs to require direct-to-consumer television advertisements to include a list price for any covered drugs that cost more than $35.
Now, that proposal is open for public comments. So far, seven have been filed, but names stay under wraps until the end of the comment period.
The Association of National Advertisers, PhRMA and the Coalition for Healthcare Communication are among the organizations that have said they plan to file against the move, but they have plenty of time before the 60-day comment period expires Dec. 17.
In the meantime, it's not just pharma that's abuzz about the proposal. The broader healthcare industry, as well as advertising and media, are also scrambling to figure out whether the proposal will stand, and if so, what effects it could have. Some declined to weigh in publicly, but others did offer some thoughts about what’s next.
Among those willing to speak up, there's a measured resolve while they await the administration’s next move.
“At this point, I think it is a little premature to speculate on how this could affect our industry, as it is only at the proposal stage and the language could differ greatly compared to where it stands right now,” said Dana Maiman, president and CEO of FCB Health Network, in an emailed statement. “That said, even if the base pricing is what is communicated, actual cost to consumers varies greatly and could result in confusion and misinformation.”
Here's what our sources are telling us about what they're watching and why.
While some players file or prepare to file comments over the next 60 days, others are anticipating the arguments for and against the proposal. More comments are likely to follow the first seven already filed—and probably from both sides.
Organizations and individuals both have publicly noted their objections, but others have praised the move and may file arguments backing the proposal. Among them are the pharmacy benefits management group PCMA and insurer organization AHIP, along with a bipartisan group of senators who passed an amendment last month to encourage drug prices in TV ads, but got voted down in the House of Representatives.
While no lawsuits have yet been filed against the proposal, several groups say they just might sue. Dan Jaffe, head of ANA's government relations office, told FiercePharma last week that the measure does not comply with the First Amendment and his group will evaluate legal action if the proposal becomes a rule. The pharma industry trade group PhRMA also didn't rule out the possibility of legal action.
But the administration and CMS say they're already prepared for First Amendment challenges. Their justification, as detailed in the Federal Register filing?
"Requiring DTC television ads to disclose pricing information to consumers, as proposed in this rule, is consistent with First Amendment jurisprudence. Rules, such as this one, that require certain factual commercial disclosures pass muster under the First Amendment where the disclosure advances a government interest and does not unduly burden speech.”
If the proposal passes muster as a rule, it could be enforced as soon as December, said Wendy Blackburn, executive VP at Intouch Solutions. That means brands advertising on TV or planning campaigns need to prepare now—not only to add the required info to their ads, but to explain it elsewhere. Intouch is recommending its clients “understand the competitive pricing landscape, review their assets, determine their approach for compliance, and get ready to provide broader pricing context to both consumers and HCPs through other channels,” she said.
PhRMA’s own pitch for publicly disclosing drug prices—announced hours before HHS Sec. Alex Azar dropped the rule filing—will have member companies link to online information that includes drug list prices, but augmented by context such as out-of-pocket costs and patient assistance programs. The voluntary PhRMA measure is set to go into effect in April.
Some argue that if pharma companies are forced to disclose prices, they'll bow out of television altogether. Instead of slogging through a laborious compliance process—or risking an unflattering result—brands may shift TV budgets to other media.
“If they’re going to have to jump through more hoops on TV spots that they’re purchasing, you’re going to see a lot of these advertisers look at alternative methods to get to people,” said Craig Mait, president and chief revenue officer of Brite Media, a point-of-care network. While physician office advertising won’t replace TV, he said, the pricing measure could push pharma to look for other avenues to patients and doctors, and like the move away from in-person sales representative visits, could be a boon for POC marketing.
Digital media channels are likely to benefit no matter what happens. Even if pharma companies don’t shift big budget dollars from TV to digital, they'll likely invest more in digital advertising to explain the list prices they add to their commercials.
That could all add up to a pain in the pocketbook for TV; after all, pharma is one of the largest TV ad spending categories. Last year, drugmakers spent more than $3.45 billion on national TV ads, according to iSpot.tv, so any pullback would hit the TV industry’s bottom line.
While the administration insists revealing drug prices in TV ads will lead to a price decreases as informed patients shop around, many others—including some pharma critics—don’t think that will happen. The nonprofit Public Citizen, for instance, agreed that adding list prices would shine a spotlight on pharma “price gouging,” but said that information wouldn't help consumers work a better deal. After all, patients have "limited or no ability to choose an alternative product," partly because their insurers call the shots on drug coverage.
Others are also worried that the list price—typically not the price paid by most people—will confuse consumers rather than helping them.
“What Secretary Azar claims is a solution to provide ‘full transparency’ and drive down costs is hardly that. Instead, this measure will confuse and mislead patients—and potentially may harm them, by discouraging them from initiating important conversations with their health providers and seeking medical care they need,” said the Coalition for Healthcare Communication in a note to members.Print
28 September 2020
28 September 2020
24 September 2020
24 September 2020