TV biz fights Trump drug pricing rule

Broadcasting and advertising groups are adding a powerful voice to the fight against a controversial Trump administration proposal that would require drug companies to share prices in their commercials.

Critics worry the new rules could discourage Big Pharma from advertising on air, costing the nation’s advertisers and television stations an important source of revenue.

{mosads}The drug industry spends as much as $6 billion on television ads a year and advertising on television accounted for 73 percent of all ad spending on prescription drugs.

The Trump administration, though, which has made lowering drug prices a top priority, is pushing ahead. The Office of Management and Budget is currently reviewing a final rule from the Department of Health and Human Services that would require companies to include their list prices in direct-to-consumer ads. PhRMA, the nation’s top drug lobby, has argued the rule would be confusing, noting that consumers often don’t pay the actual list price for a drug.

Television and ad industry groups are challenging the rule, giving the drug lobby a powerful ally in the fight.

The Association of National Advertisers (ANA) voiced their opposition in a filing, arguing that forcing pricing disclosures in TV ads is likely to mislead consumers and could violate First Amendment protections.

“The government can force mandatory disclosures, but only if the disclosures are factual and noncontroversial, and we don’t think that this would meet either of those criteria because only a very small proportion of the public pays the list price,” Dan Jaffe, head of the ANA’s Government Relations office, told The Hill.

Jaffe and others worry that instead of providing clarity, the ads could lead consumers into making poor decisions.

{mosads}“The numbers that would be providing to the public would be very misleading and might even be detrimental in the fact that if the price was very high, but they wouldn’t have to pay that high price, they might not even go to their doctor and try to get treatment,” he cautioned.

The ANA’s filing argued the rule is unconstitutional for First Amendment reasons. But Jaffe said that even if the move was deemed constitutional, there are too many variables at play.

“Ten different people might be facing 10 different prices, so giving them a single price that is not accurate for any of them would be very detrimental,” he said.

The National Association of Broadcasters also opposed the rule in a filing to the Centers for Medicare and Medicaid Services (CMS). Broadcasters called the rule unconstitutional and beyond the scope of CMS’s statutory authority.

“It also unfairly and unjustifiably singles out television advertising, creating a disincentive for prescription drug and biological products manufacturers to advertise on television alone and therefore driving them to advertise on print media, social media and other outlets,” the filing reads.

It added that the rule would “reduce or eliminate the substantial public interest benefits of drug advertising.”

NCTA – The Internet & Television Association, the trade association for the cable television industry, also wrote to CMS in December, saying the rule raises First Amendment issues.

“The fact that the regulation applies only to advertising that appears on television but not on websites and print exacerbates the adverse impact it has on protected speech – an impact that must be taken into account under any established level of First Amendment scrutiny,” the letter reads.

But the rule has strong support, particularly on Capitol Hill, where lawmakers from both parties are moving to target high drug costs.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa), who backs the rule, has long pushed for drug companies to be more transparent about their pricing. Grassley has been holding hearings on drug costs and is pushing for Big Pharma to do more to lower prices.

And the proposed Trump rule has support from Democrats, including Sen. Dick Durbin (Ill.). Durbin pressed Health and Human Services Secretary Alex Azar about the TV drug-price rule during a hearing on the budget Thursday. Lawmakers made a similar effort last year, but the measure was removed from a spending bill by the then-GOP-controlled House.

“Pharma spends $6 billion each year to flood the airwaves, steering patients to the costliest drugs — even when a generic may be available or other treatment may work. They rattle through side effects, but never tell you how much it costs,” Durbin told The Hill.

And he noted that the government spends big on those drugs.

“It entirely inflates spending on drugs. In 2017, Medicare and Medicaid spent $24 billion on the top 20 most-advertised drugs on television.”

Durbin said the proposal has bipartisan support, and the backing of doctors and other medical groups.

“Requiring drug companies to include price tags on direct-to-consumer TV ads is a policy that is widely supported by Democrats, my partner Sen. Grassley and Republicans, doctors, hospitals, 88 percent of Americans, and even President Trump. Patients deserve transparency,” Durbin said.

The administration’s plan to require disclosure of drug prices is supported by groups like the American Medical Association (AMA), the American Hospital Association, America’s Health Insurance Plans and the Blue Cross Blue Shield Association

AMA is opposed to allowing direct-to-consumer advertising of prescription drugs but believes such advertisements should come with greater transparency. They say the rule does not go far enough.

“While this proposed rule alone won’t remove the often-misleading nature of prescription drug ads, it will give consumers a data point that is currently unavailable. That is a step in the right direction,” AMA President Barbara McAneny said in a statement in October.

The administration proposed the rule in October, and it could be finalized soon. Industry groups are likely to take their challenge to the courts.

PhMRA also unveiled their own industry guidelines in October in an effort to counter the rule.

Those changes would include voiceovers on TV ads telling consumers to go to a company website for more information on prices instead of directly sharing list prices.

In the meantime, many prominent companies have begun making plans to comply with the upcoming rule.

Johnson & Johnson has started airing a commercial that discloses the list price of a widely prescribed blood thinner, Xarelto, at $448 a month.