TV Ads Now Required to Display Drug Prices: What Does It Mean for Patients?
Update (July 11, 2019):
Federal judge Amit Mehta blocked this initiative on Monday, July 8, 2019, stating the HHS has no official authority to enforce it among drug manufacturers. Mehta stated that the decision was not an opinion on how effective the rule would be in lowering prescription drug prices, but that the responsibility to pass such a regulation would lie with Congress and not the HHS.
Starting in two months, drug manufacturers will be required to display list prices in TV ads for treatments costing more than $35 a month, a step that Alex Azar, Secretary of Health and Human Services (HHS), called “monumental” in terms of putting patients in control of their healthcare costs. Let’s look at what these list prices mean to patients, and what else it might take for real drug pricing transparency.
What are list prices?
There’s a lot of debate about the importance of list prices to the average American. While the list price is the “official” price of a drug set by manufacturers, few patients actually see that number at the pharmacy counter, thanks to their health insurance (and all the hidden transactions involved to determine that price).
As Azar points out, those who are uninsured, have high-deductible health plans, or whose insurance plans don’t cover the medication they need will most likely have to pay high out-of-pocket costs. For brand-name drugs, the retail or cash prices that those patients pay are typically reflective of high list prices and often cause sticker shock.
Are list prices enough for transparency?
Direct-to-consumer (DTC) commercials are often released for newly-approved drugs or blockbuster drugs facing competition to raise awareness and encourage patients to seek more information about the products. These DTC ads have remained relatively unregulated, so the move to mandate that list prices be included has sparked early concerns over drug makers’ First Amendment rights.
Another issue raised by the Pharmaceutical Research and Manufacturers of America (PhRMA) is the potential for high list prices to confuse patients and dissuade them from considering the treatment at all. To address this, PhRMA has launched the Medicine Assistance Tool (MAT), an online search tool for patients to find information on drug savings programs. The catch, of course, is that these manufacturer’s coupons and patient assistance programs are often not available to those on Medicare, Medicaid, and other government health plans.
Neither list prices nor manufacturer discounts provide the full picture of what a drug actually costs for an individual patient. What most people want to know when making decisions about their health is whether they can afford the out-of-pocket price they’ll have to pay at the pharmacy.
Xarelto: The first TV ad with drug pricing
Here’s how one drug maker, Johnson & Johnson (J&J), is trying to provide that clarity. Following the Trump administration’s initial proposal to lower drug prices last year, J&J was the first to add pricing information to their DTC ad for Xarelto, their popular anticoagulant. The updated commercial, which debuted late March 2019, displays Xarelto’s monthly list price of $448, along with what J&J says are potential out-of-pocket costs, ranging from $0 to $47 across commercial, Medicare, and Medicaid patients. In an interview with STAT, J&J says patients are given a website at the end of the ad for more information on their actual costs.
Will transparency really lower drug prices?
While price transparency is a good start, it doesn’t mean much if patients are stuck with high drug costs. HHS Secretary Azar hopes that drug makers will lower drug prices if they think the cost of their drugs will scare people away. But given that HHS cannot properly enforce their new regulation to include ads (instead, HHS will rely on drug companies to sue each other for “false or misleading advertising” if they don’t display list prices), it’s not clear how effective it will be.
While price transparency is a good start, it doesn’t mean much if patients are stuck with high drug costs. HHS Secretary Azar hopes that drug makers will lower drug prices if they think the cost of their drugs will scare people away. But given that HHS cannot properly enforce their new regulation to include ads (instead, HHS will rely on drug companies to sue each other for “false or misleading advertising” if they don’t display list prices), it’s not clear how effective it will be.
How can I find out what my drug costs?
At GoodRx, our mission has always been to make healthcare affordable for everyone—and that involves transparency around the choices you do have. Here’s how GoodRx can help you understand your options, regardless of your insurance status.
GoodRx has the largest database of copay cards and patient assistance programs. In addition to listing free GoodRx coupons, we also provide information on over 2,100 manufacturer savings programs. You can access this by searching for your drug on GoodRx.com or the GoodRx mobile app and going to “Savings Tips”. At the time of publishing this article, PhRMA’s Medicine Assistance Tool only has this information for about 500 programs.
The GoodRx Patient Advocacy team is dedicated to helping patients get the lowest prices on medications. They offer free guidance on how to utilize the savings programs mentioned above, as well as the GoodRx Gold membership program, to help you find your best option. You can reach the Patient Advocacy team by calling 1-888-799-2553.
The GoodRx blog keeps you informed of the latest FDA announcements, new savings programs, and insurance changes. We explain why things like formulary exclusions and coverage restrictions can lead to higher out-of-pocket costs, and how you can save money with GoodRx and other savings programs.
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