Trump’s effort to put drug prices in ads now in limbo

Posted at 6:02 PM, Jul 09, 2019
and last updated 2019-07-09 20:02:08-04

A federal court judge ruled in favor of blocking the Trump administration’s regulation to require drug prices to appear in televised advertisements — leaving many health experts and consumers questioning what happens next.

The US Department of Health and Human Services said it was disappointed with the latest ruling and would work with the Department of Justice on next steps related to litigation.

This regulation, which was a centerpiece of the administration’s efforts to bring down drug prices, was set to go into effect on Tuesday.

“I hope that this regulation moves quickly through the legal challenges process and can get implemented, because we need more transparency in drug prices in our system,” Adrienne Faerber, a lecturer and health outcomes researcher at The Dartmouth Institute for Health Policy and Clinical Practice in New Hampshire.

US District Judge Amit Mehta of the District of Columbia ruled on Monday that by implementing this regulation that would have required drug makers to include their list prices in TV ads, the Department of Health and Human Services would have been overstepping its authority.

“No matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized,” Mehta wrote. “The responsibility rests with Congress to act in the first instance.”

This decision was made following a lawsuit, filed in June by Merck, Eli Lilly, Amgen and the Association of National Advertisers, which argued that the regulation would mislead patients about how much they have to pay for medication and that the department had exceeded its authority.

At the time, the Association of National Advertisers said in a blog post, “We believe that this rule is a serious threat to the First Amendment protections of advertising and would create precedents that would be extended to many products far beyond the area of prescription drugs.”

‘Transparency … is a good thing for patients’

Many health experts saw the effort to require pricing information in ads as a positive step.

The American Medical Association and AARP, for instance, are among groups that have applauded this effort to require drug pricing in ads.

“Transparency in drug pricing, whatever form that might come in, is a good thing for patients,” said Faerber, who was not involved in the policy.

“People often know what their copay is, but they don’t really know the total price of their drug,” she said. “I hope that this regulation moves quickly through the legal challenges process and can get implemented, because we need more transparency in drug prices in our system.”

While more research is needed to determine whether the regulation would make a difference in public health, one paper published in the journal JAMA Internal Medicine in January suggests that price disclosure may lower consumer interest in high-priced drugs and have little influence on consumer responses to low-priced drugs.

“While price disclosure had little influence on consumer responses to the low-priced drug, it substantially decreased consumer interest in the high-priced drug. However, this finding weakened if the advertisement included a modifier indicating that consumers’ out-of-pocket cost might be zero,” the researchers wrote in that study.

The paper showed 580 participants advertisements for a fictitious diabetes prescription drug. Some of the ads disclosed either a low or high price or no price or a modifier in which “eligible patients” may get the drug for as little as $0 per month.

“We do know a lot from other areas of marketing, advertising and how those sorts of things have an effect. So we do know that television drug advertising does increase use of drugs, especially when those drugs are new to the market and don’t have other competitors. So that’s been studied in a number of different research studies,” Faerber said.

“To summarize, prescription drug advertising on TV does increase prescriptions for drugs when they’re new and they’re the first thing on the market,” she said. “Generally those drug ads very rarely have cost information.”