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CMS Proposes to Require Manufacturers to Disclose Drug Prices in Television Ads

Tuesday, November 20, 2018   (0 Comments)
Posted by: Katherine Lally
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CMS Proposes to Require Manufacturers to Disclose Drug Prices in Television Ads

Proposed rule would further the Trump Administration’s commitment to lower prescription drug prices by requiring companies to list prices for prescription drugs covered in Medicare or Medicaid 

As part of the agency’s ongoing efforts to empower patients and lower prescription drug prices, the Centers for Medicare & Medicaid Services proposed today to require that prescription drug manufacturers post the Wholesale Acquisition Cost (WAC) for drugs covered in Medicare or Medicaid in direct-to-consumer television advertisements.

“This historic proposal is an important way to create new incentives for drug companies to start lowering their list prices, rather than raising them,” said HHS Secretary Alex Azar. “President Trump’s drug-pricing blueprint called for HHS to consider how to accomplish this goal, and now we are following through on this measure to better inform patients, help them lower their drug costs, and reduce unreasonable spending in Medicare and Medicaid.”

The proposed rule would work to inject greater transparency into the prices prescription drug manufacturers set and would give beneficiaries important information they need to make informed decisions based on cost, while concurrently providing a moderating force to counteract price increases. 

“President Trump and Secretary Azar are working tirelessly to bring down prescription drug prices, and today CMS is continuing to execute on the President blueprint,” said CMS Administrator Seema Verma.  “We are committed to price transparency across-the-board, and prescription drugs are no different.  Patients often pay their cost-sharing or deductible off of a drug’s list price.  Today’s proposed rule would ensure that those list prices are included in television advertisements, so patients have the information they need to make informed decisions.”

Under the proposed rule, the price required to be posted would be for a typical course of treatment for an acute medication like an antibiotic, or a thirty day supply of medication for a chronic condition that is taken every month, and the posting would take the form of a legible textual statement at the end of the ad.  The HHS Secretary would maintain a public list of drugs that were advertised in violation of this rule.  CMS would provide an exception to the requirement to post prices for prescription drugs with list prices of less than $35 per month.

Additionally, to advance the Administration’s goal to ensure drug price transparency and also account for the different ways Americans receive advertising and promotional messages, CMS is seeking comment on whether the regulation should apply to advertisements in other media forms such as radio, magazines, newspapers, websites, and social networking sites.

Today’s announcement further strengthens CMS’s commitment to pull back the curtain on the system of drug pricing.  Earlier this year, CMS released a redesigned version of the Drug Spending Dashboards which include year-over-year information on drug prices and, for the first time, highlight which manufactures have been increasing their prices. This move was an important step to bringing transparency and accountability to a process largely hidden from patients.

The agency has also taken action to promote transparency in other areas of the healthcare system, such as by requiring hospitals to post their standard charges online in a machine-readable format.  In addition, CMS recently launched the eMedicare initiative to empower beneficiaries with cost and quality information.  This announcement included the launch of a mobile-optimized out-of-pocket cost calculator that will provide beneficiaries with information on both overall plan costs and prescription drug costs.

For a policy brief on the Drug Pricing Transparency CMS-4187 proposed rule, please visit: https://www.hhs.gov/about/news/2018/10/15/what-you-need-to-know-about-putting-drug-prices-in-tv-ads.html

The proposed rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/.


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