The Trump administration will require drug companies to post their list prices in consumer ads under a proposal to be announced next week — a prominent part of its drug price agenda, according to four individuals with knowledge of the plan.
The move — which follows months of battles between the administration, congressional leaders and the pharmaceutical industry — is one of many proposals in President Donald Trump’s blueprint to lower drug prices. But experts caution that the impact may be relatively insignificant and it could even confuse patients, considering the complexities of drug pricing.
“There is a real question whether the idea could be executed [to] give meaningful, nonmisleading information to patients,” said Coleen Klasmeier, a partner at Sidley Austin who focuses on pharmaceutical law.
The administration reiterated its commitment to lowering drug prices, in response to POLITICO’s initial report of the looming proposal.
“While we cannot comment on pending regulations, the President’s ‘American Patients First’ blueprint to lower prescription drug prices and reduce out-of pocket costs clearly states that HHS is looking at options to require drug pricing transparency,” said HHS spokesperson Caitlin Oakley. “It should not come as a surprise that this would require rulemaking.”
HHS Secretary Alex Azar is scheduled to give a speech Monday afternoon that will address the administration’s drug pricing reforms.
The agency’s proposal has been under review by the White House since August and is expected to be published in the Federal Register as soon as Monday. The rule would be issued through CMS and the agency’s regulatory authority under the Social Security Act.
Drugmakers have opposed the idea and worked to strip a similar proposal from a congressional funding package last month.
“Such a requirement would not benefit patients, could have the unintended and harmful consequence of deterring patients from seeking care and would raise legal concerns,” the industry’s major trade group PhRMA warned HHS this summer.
Policy experts also are skeptical that the proposal will do much to rein in high prices, since drugmakers’ list prices are mostly used as a starting point for negotiations with other health care payers and few patients are asked to pay them. They also have cautioned that it could affect public health by discouraging the use of some medicines.
“The price of a drug has absolutely no relation to the cost for a consumer,” said Dale Cooke, a consultant who specializes in drug advertisements and has been a vocal critic of the government’s plan. He also cautioned that an ad containing a high list price could scare away patients who will assume they can’t afford the cost of the drug, even if their health insurance would pick up most of the cost. “That would potentially be tragic,” Cooke said.
“If the government wanted to bring down the prices of drugs, you could think of a bunch of different ways … without trying to hijack the manufacturers’ own speech to do it,” added Sidley Austin’s Klasmeier.
But Azar and President Donald Trump have championed the idea as a simple, understandable way to address high drug prices.
“I actually think it’s an important part of fair balance,” Azar said on POLITICO’s “Pulse Check” podcast in May. “I believe consumers should have a right to know that information.”