The pharma industry spent $3.45 billion on television ads in 2017 and none of those ads mentioned drug prices.
The Trump administration wants to change that.
In his Rose Garden speech earlier this month, President Trump suggested that direct-to-consumer ads include mandatory pricing information along with risk issues and other educational information.
The strategy laid out by Trump as well as Health and Human Services Secretary Alex Azar was fairly straightforward in that consumers deserved to understand how much advertised drugs cost in the name of transparency. Left unsaid was a primary mover in the administration's efforts to decrease prescription drug prices, shame.
The high concept is that if Merck & Co. (MRK) - Get Report is required to state in its ads for oncology med Keytruda that a year of the drug cost $150,000, it will be embarrassed by that high price tag being public knowledge and decrease the cost.
Since launching its public campaign, the administration has had the Centers for Medicare and Medicaid Services redesign its Drug Spending Dashboards to include information on year-over-year drug pricing and who makes those medications. Then the Food and Drug Administration posted a list of drug companies that it had received complaints about interfering with generic drug companies trying to purchase name brand meds so they could make generic copies.
Those federal agencies have help on Capitol Hill. A group of five Senators led by Dick Durbin, D-Illinois, sent letters this month to major pharmaceutical companies to voluntarily include prices in their ads. "No other industry shrouds the price of a consumer good in such a way -- patients deserve more drug price transparency," Durbin and the other senators wrote in the letters. In the letter to Pfizer (PFE) - Get Report it said, "When Pfizer spends $1.3 billion each year on its pharmaceutical advertisements in the United States, it should tell the whole story and provide clear information about drug prices, so patients can make informed decisions."
Besides Pfizer, the letter went to out to AbbVie (ABBV) - Get Report , Bristol-Myers Squibb Co. (BMY) - Get Report , Eli Lilly & Co. (LLY) - Get Report Merck, Novartis AG (NVS) - Get Report and GlaxoSmithKline Plc (GSK) - Get Report .
Direct-to-consumer TV ads are found in only two countries, the U.S. and New Zealand. The American Medical Association called for their prohibition in 2015, alleging that the commercials do more harm than good. But that idea failed to resonate with the FDA. For the record, the AMA is in favor of having prices included in TV spots.
The AMA's opposition to direct-to-consumer spots is long-standing since the ads fundamentally changed how patients interacted with their doctors. A study by drug company advocate Pharmaceutical Research and Manufacturers of America shows that 35% of patients ask their doctor about a specific drug after seeing an ad.
As for where PhRMA stands on mandatory pricing in TV ads, the lobbying organization supplied this statement to TheStreet, "The disclosure of medicine list prices in DTC ads would provide no meaningful benefit to patients given the significant negotiations occurring in the marketplace. List prices are not the prices that insurers actually pay and are often not a good indicator of what the consumer will pay at the pharmacy counter since their insurer may charge a flat copayment or coinsurance. Price comparison websites already exist to help consumers compare and look for the best retail prices, the price the consumer actually pays for their medicines at their pharmacy."
Considering drug companies spent $6.1 billion advertising in 2017, according to Kanter Media, it's understandable they might not want federal agencies telling them what the ads need to contain.
The TV ad policy is still a work in progress and critics have pointed out the difficulty of deciding what price to use in the ads, list, average sales price, net cost, or best price.
The top three drug companies in terms of TV spending in March 2018, AbbVie, Pfizer and Merck, spent a combined $70 million advertising Humira, Lyrica and Keytruda, according to Statista. Those companies did not respond to requests for comment on the proposed policy.
Advocacy group Patients for Affordable Drugs doesn't believe the Trump TV policy will work because people will simply become numb to the numbers.
Whether the federal government can force the drug companies to include price data is a open legal question. Some critics have charged that free speech issues would seem to favor the drug companies. But fans of the proposed policy reason that if the FDA can dictate the inclusion of risk factors in TV spots, pricing information is a no-brainer.