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Will TV Ads Drive Down Drug Prices?

drug prices

In May, Health and Human Services secretary Alex M. Azar II announced that pharmaceutical companies will soon be required to include the price of prescription drugs in television advertisements, if the cost of those medications exceeds $35 per month, which includes most drugs used to treat and prevent HIV.

The new policy is an attempt to address the rising cost of prescription drugs — a key issue for American voters and one that both Republicans and Democrats have vowed to address.

The proposed policy is anticipated to be challenged by the drug industry, which argues that revealing the list price will confuse consumers and could violate the companies’ First Amendment rights. While the list price of some drugs can be thousands of dollars a month, consumers often pay far less. Those with insurance or Medicare coverage that includes prescriptions may see out-of-pocket copays of $50, $20, $5, or even $0.

According to officials at the Department of Health and Human Services, to address those concerns, a disclaimer will be displayed, stating: “If you have insurance that covers drugs, your cost may be different.”

Azar promoted the new guidelines expected to take effect this summer, telling reporters, “We are moving from a system where people are left in the dark to a system where patients are put in the driver’s seat.”

As anyone who watches TV these days knows, drug companies are already required to list common side effects in ads. Now, all direct-to-consumer TV ads for drugs covered by Medicare or Medicaid must also include the list price, also known as the wholesale acquisition price.

A 2011-2014 study from the Centers for Disease Control and Prevention found that nearly half of all Americans (48.9 percent) had taken at least one prescription drug in the past 30 days, making this the first truly bipartisan issue the administration has addressed.

The move has been pushed by patient advocacy groups, which have complained that televised drug ads often promote high-priced medications that people don’t necessarily need. In fact, many of the most heavily advertised drugs are the most expensive and literally cost thousands of dollars per month. Two dosing pens of AbbVie’s Humira, used to treat rheumatoid arthritis and other conditions, have an average retail price of $5,684 (according to drug price-tracking website GoodRx). Another heavily advertised drug, Xeljanz, a Pfizer arthritis medication, costs about $4,840 a month.

The measure was applauded by Richard Durbin, a Democratic senator from Illinois, and Charles Grassley, a Republican senator from Iowa. Both have tried to pass similar legislation in the past.

“Direct-to-consumer prescription drug advertisements are everywhere, and they tell you just about everything imaginable about the drug, other than its price,” the senators said in a joint statement. “We believe American patients deserve transparency.”

Ultimately, this could help drive prices down on many medications — even those that are lifesaving, such as drugs used to treat HIV.

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