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Analysis

'We Will Go Further': Azar Eyes Mandate Despite PhRMA's New Approach to TV Ads

By Steven Porter  
   October 15, 2018

The HHS secretary called PhRMA's voluntary action 'a small step in the right direction' but vowed to carry the Trump administration's to completion.

Health and Human Services Secretary Alex Azar could soon unveil a plan to impose new pricing transparency requirements on direct-to-consumer pharmaceutical advertising.

Update: Proposal Would Require Drugmakers to Put Prices in Their TV Ads

Azar is scheduled to deliver what HHS spokespeople are describing as a major policy address Monday afternoon during the National Academy of Medicine's Annual President's Forum. This comes after Politico reported Friday that the Trump administration plans to announce a proposal this week to require drug companies to publish their list prices in consumer ads.

Industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA) said earlier this year that imposing such a requirement would not help patients and could cause problems. Mere hours before Azar's speech, the group released an announcement Monday morning outlining a "new approach" to TV ads among PhRMA members.

Revisions to PhRMA's voluntary principles pertaining to direct-to-consumer TV ads adopted earlier this month include a new guiding principle: "All [direct-to-consumer] television advertising that identifies a medicine by name should include direction as to where patients can find information about the cost of the medicine, such as a company-developed website, including the list price and average, estimated, or typical patient out-of-pocket costs, or other context about the potential cost of the medicine."

PhRMA President and CEO Stephen J. Ubl said in a statement that group members heard calls from the White House and Congress to make drug pricing more transparent "and our members are voluntarily stepping up to the plate."

That action may be insufficient, however, in Azar's eyes.

"Our vision for a new, more transparent drug-pricing system does not rely on voluntary action," Azar said in a statement released shortly before noon Monday. "The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay."

Azar—whose ties, and possible loyalties, to the pharmaceutical industry as a former Eli Lilly executive were scrutinized during his confirmation process last year—called PhRMA's voluntary action "a small step in the right direction."

But, he added, "we will go further and continue to implement the President's blueprint to delivery new transparency and put American patients first."

Centers for Medicare & Medicaid Services Administrator Seema Verma echoed Azar's statement Monday afternoon.

"CMS appreciates the pharmaceutical industry’s action to increase transparency, but additional steps are required to ensure that patients have all of the information they need when they are learning about a medication," Verma said.

Eli Lilly Chairman and CEO David A. Ricks—who served 2009-2012 as president of Lilly USA before Azar served 2012-2017 in that post—voiced his support for PhRMA's move in a blog post Monday.

"Through new research, we know that the information patients care most about is how much they need to pay out of pocket, along with other context about their cost of their medicine," Ricks wrote. "Our commitment will leverage the power of [direct-to-consumer] advertising to help patients find the information they want and need."

The new voluntary PhRMA guidelines take effect in April, but members will begin changing their direct-to-consumer ads in the coming months, the trade group said.

About the proposal to require drug list prices in TV ads, PhRMA said it is concerned that list price information is insufficient and could dissuade patients from seeking the care they need.

"List prices are not a good indicator of what a patient will pay at the pharmacy counter and do not reflect the substantial discounts and rebates negotiated by insurers and pharmacy benefit managers," PhRMA said. "In addition, any such requirement would raise significant legal issues, including First Amendment concerns."

Editor's note: This story has been updated to include statements from Seema Verma and David Ricks.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

A proposal on drug price transparency could come as soon as Monday afternoon.

Industry group PhRMA announced new voluntary principles to which its members have agreed.

The HHS secretary suggested voluntary action may not be enough.


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