President Trump is taking aim at drug companies in an effort to lower prices for Americans.
The Trump administration announced a new policy Wednesday that will require that the cost of medications be disclosed in television advertising by drug manufacturers.
Pitting administration officials against an inevitable battle with lobbies representing the drug, television and advertising industries, the new rule requires that costs have to be revealed for any 30-day supply of Medicare and Medicaid-covered drugs costing over $35.
“American patients deserve to know the prices of the healthcare they receive,” Health and Human Services Secretary Alex Azar said in a statement, touting the policy as the “single most significant step” undertaken by any administration.
“Patients who are struggling with high drug costs are in that position because of the high list prices that drug companies set,” he added. “Making those prices more transparent is a significant step in President Trump’s efforts to reform our prescription drug markets and put patients in charge of their own healthcare.”
Today we’re telling drug companies they have to come clean to patients about the cost of their drugs: It’s time to put the prices in your TV ads. Transparency for American patients is here. https://t.co/DhBfsUSbkl
— Secretary Alex Azar (@SecAzar) May 8, 2019
Pharmaceutical companies will have to post information about the monthly cost of the medications onscreen at the end of advertisements, in clear and easy to read text. Any company that does not comply will be added to a list published by the HHS and may be subject to potential litigation.
The ruling will only apply to television advertising for now, where drug companies spend $4 billion a year, Azar explained.
“Patients have the right to know the prices of healthcare services, and CMS is serious about empowering patients with this information across-the-board,” Seema Verma, administrator for the Centers for Medicare & Medicaid Services, said.
“Today’s final rule is an important step toward achieving President Trump’s vision for lowering prescription drug prices by bringing much-needed pricing transparency to the convoluted market for prescription drugs. Equipped with information on prescription drug prices, patients will be better able to make informed decisions and demand value from pharmaceutical companies,” Verma added.
Azar also noted that the companies will be pressured by the federal government to keep their prices lower with the new policy and other existing administration efforts. He also dismissed concerns about the legality of the ruling as patients have a “fundamental right” to know about the cost of product they are being sold.
“We think it is a fundamental right to know whether that drug they’re being pitched is a $50 or $5,000 drug,” Azar said.
The drug industry apparently does not agree and will likely take the issue to court, reportedly arguing that the rule violates their First Amendment rights.
They also contend that displaying prices may be confusing to patients as the cost that they will be required to show may not be accurate, as costs borne by patients can be different. Health insurers, hospitals and even the government can negotiate prices that may end up being different from what had been disclosed in the advertising.
Some companies have already taken steps ahead of the administration ruling, with Johnson & Johnson earlier this year making the decision to disclose to consumers the prices of its prescription medicines, as well as any potential out-of-pocket costs to patients.
Other companies reportedly have websites with further information for patients, a move that Azar said was “not acceptable.”
“If you’re ashamed of your drug prices, change your drug prices,” he said in a phone call with reporters Wednesday, according to the Washington Examiner. “It’s that simple.”
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