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Would requiring drug advertisements to list price tags really help lower prices?

What the US presents as a matter of transparency has raised questions from consumers, doctors & drugmakers


IF US President Donald Trump has his way, television viewers who see commercials for the drug Keytruda will learn not only that it can help lung cancer patients, but also that it carries a price tag of US$13,500 a month, or US$162,000 a year.

Viewers who see advertisements for Neulasta, a drug that reduces the risk of infections after chemotherapy, would learn that the list price for each injection is US$6,200. And magazine readers would see a new bit of information in ads for Humira, the world's best-selling drug, prescribed for rheumatoid arthritis and other autoimmune diseases: its list price, which has been widely reported as approximately US$50,000 a year.

The disclosure of such data is perhaps the most eye-catching goal of Mr Trump's plan to lower drug prices. The president is determined to bring "price transparency" to the market in an effort to stimulate competition and overturn the current convoluted, opaque system in which everyone but the consumer benefits from higher prices, said Alex M Azar II, the secretary of health and human services.

The idea seemed like an idle threat at first. The White House floated it as one of 50 options when Mr Trump, in a Rose Garden speech on May 11, vowed to "bring soaring drug prices back down to earth". Three days later, however, Mr Azar said the Food and Drug Administration and the Centers for Medicare and Medicaid Services were examining not whether but "how to require drug companies to post their list prices in direct-to-consumer advertising". He hammered the theme again on Wednesday, saying that "when patients hear about a wonderful new drug, they should know whether it costs US$100 or US$50,000". But what the administration presents as a simple matter of transparency has raised a torrent of questions from consumers, doctors, drugmakers and advertising professionals. Would it be legal? How would it work? Would it actually drive down drug prices? Would it be counterproductive, since high prices could discourage patients from considering helpful medicines?

And the experts asked: What price would be advertised? Different people pay different prices for the same drug, depending on whether they have insurance or what type of coverage they have.

Mr Trump and Mr Azar, a former pharmaceutical executive, have put drugmakers on the defensive. Companies that pour hundreds of millions of dollars into drug advertising were tongue-tied when asked to comment on the president's proposal.

Among them was AbbVie, which spent US$429 million advertising Humira to American consumers last year - the most for any prescription drug in the United States, according to Kantar Media, an ad tracking company. Jillian Griffin, a spokeswoman for AbbVie, declined to comment.

Laurel Sacks, a spokeswoman for Bristol-Myers Squibb, said ads for its lung cancer drug Opdivo "play a critical role in educating patients" and inform them of "options beyond chemotherapy". But she declined to say whether the ads should be required to disclose the list price of Opdivo, about US$13,680 a month per patient.

The American Medical Association (AMA) supports a ban on drug advertising aimed at consumers. The proliferation of such ads - spending on them reached US$6.1 billion last year in the United States, according to Kantar Media - is driving demand for new, more expensive medicines, even when less costly but effective alternatives are available, the group says.

Until a ban is in place - and none is in sight - the AMA says that advertisements for prescription drugs should be required to state the manufacturer's suggested retail price for those drugs.

Experts said that providing the list price, as recommended by the Trump administration, could be misleading because, in many cases, it is not what consumers pay.

"What an individual pays for a given drug is driven by lots of hidden and some obvious factors," said Dr Clifford Hudis, chief executive of the American Society of Clinical Oncology, an organisation of cancer doctors. "So it could be a challenge to disclose prices in a uniform and consistent fashion." A major purpose of direct-to-consumer advertising is to encourage patients to ask doctors about particular drugs. Those talks are more likely to include a discussion of prices if that information is readily available in ads, administration officials said. Officials hope that by publicising such data, they can force drugmakers to compete aggressively on prices.

Wendy Blackburn, executive vice-president of Intouch Solutions, an advertising agency in Overland Park, Kansas, that has developed ad campaigns for many drug companies, called the price proposal "doable", but said she feared "that it would be more confusing than helpful to consumers". Consumers' perceptions could be skewed, she said. "If a consumer has a choice of five drugs and one is more expensive," she added, "the consumer may think the more expensive drug is the better drug. That's often how people make decisions. Mr Trump's intentions may actually backfire on him." Other experts said that giving list prices could be not just confusing but also ineffective.

David Mitchell, founder of Patients for Affordable Drugs, a non-profit advocacy group, said: "It's good to make information available to patients and consumers, but a disclosure requirement is not going to lower the prices of prescription drugs. The numbers could be so big - US$10,000 a month - that at some point, people could become inured to it."

John Kamp, an expert on medical marketing, said that a drug-price disclosure requirement, "as a form of compelled speech, could violate the First Amendment". But David Vladeck, a law professor at Georgetown University who has litigated many cases involving commercial speech, said: "The government has broad leeway to require disclosure of factual information that would be material to consumers. A requirement that you simply tell people what the price is would be constitutional." NYTIMES

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