PhRMA Submits Comments on CMS Proposed Regulation to Require Drug Pricing Transparency
On December 17, 2018, the Pharmaceutical Research and Manufacturers of America (PhRMA) submitted comments in response to the Centers for Medicare & Medicaid Services (CMS) proposal to require the disclosure of drug prices in television advertisements.
The proposal, issued earlier in 2018, would require prescription drug manufacturers to post the Wholesale Acquisition Cost (WAC) for drugs covered by Medicare or Medicaid in direct-to-consumer (DTC) television advertisements. Under the proposed rule, the price required to be posted would be for a typical course of treatment for an acute medication like an antibiotic, or for a thirty-day supply of medication for a chronic condition that is taken every month, and the posting would take the form of a legible textual statement at the end of the ad. CMS would allow an exception to the requirement to post prices for prescription drugs with list prices of less than $35 per month.
In its responsive comments, PhRMA noted that it supports “providing meaningful information about the costs of medicines to patients,” but that it is important that any cost-related information provided to patients help patients make informed decisions about their medical care. In pursuit of that goal, PhRMA’s Board adopted revised voluntary Guiding Principles on Direct-to-Consumer Advertisements in October 2018. All PhRMA member companies have individually and voluntarily committed to these Guiding Principles, which will take effect in April 2019.
Under the Guiding Principles, signatory companies’ DTC television advertisements will “include direction as to where patients can find information about the cost of the medicine, such as a company-developed website, including the list price and average, estimated or typical patient out-of-pocket costs, or other context about the potential cost of the medicine.
PhRMA also noted that it has partnered with consumer, patient, pharmacist, provider, and consumer groups to develop a new patient affordability platform in the coming months. When fully implemented, the new platform will enable patients to search for a medicine and find resources to help patients navigate their insurance coverage, information on how to access company-specific patient assistance and other forms of cost-sharing support, and company-determined information on cost and affordability.
Also included in the comments were statements about how compelling disclosure of the list prices does not directly benefit, and may actually harm, Medicare and Medicaid beneficiaries. PhRMA noted that the list price alone does not convey to patients meaningful information about how much they will actually pay for a medicine. Without providing additional context, such as a patient’s average, estimated, or typical out-of-pocket costs, disclosure of the list price in a DTC advertisement could give patients the false impression that they are required to pay the full list price, rather than the copay or coinsurance that the patient is actually responsible for. Medicaid beneficiaries typically pay fixed copays or no copays at all and Medicare Part D beneficiary cost-sharing for prescription drugs can vary throughout the year, as it depends on the phase of the benefit.
PhRMA also included objections relating to its belief that CMS lacks the statutory authority to issue the proposed rule and that the First Amendment prohibits CMS from mandating manufacturers to state a drug’s list price in DTC advertisements.