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Senate Moves Toward Drug Price Transparency in Consumer Ads

The Senate's minibus spending bill has provisions to regulate direct-to-consumer drug advertisements and to require price transparency in ads.

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Source: Thinkstock

By Sara Heath

- Better drug price transparency in direct-to-consumer marketing plays a key role in a funding package that has recently passed in the Senate.

In a bipartisan amendment funding both the Health, Education, Labor, and Pensions (HELP) and Defense committees – referred to as a minibus spending bill – Senators agreed that drug companies must disclose the costs of their medications in direct-to-consumer advertisements. The minibus as passed in the Senate calls for $1 million in funding to create regulations for drug advertisements as part of these cost disclosures.

Ideally, better price transparency in drug advertising will improve patient empowerment, create competition through cost comparison and price shopping, and lower drug costs, according to Senators Dick Durbin (D-IL) and Chuck Grassley (R-IA), two legislators who supported the price transparency amendments.

“This drug pricing proposal was supported by both Democratic and Republican senators, the American Association of Retired Persons, the American Medical Association, America’s health insurance plans, 76 percent of the American people, President Donald Trump, and the Department of Health and Human Services. The only group who opposed it? Big Pharma,” Durbin said in a statement. “What Senator Grassley and I wanted to do is to give the American people more information about drug costs. More information gives transparency to the transaction, and will help give American consumers a break and start to slow down the skyrocketing cost of prescription drugs.”

Currently, drug manufacturers spend about $6 billion on direct-to-consumer advertisements, Durbin and Grassley reported.

These advertisements do excellent work to educate patients about the impacts of a medication and the potential side effects, Grassley pointed out. It is high time they also educate patients about the costs associated with these drugs.

“What we’ve been trying to do is pretty simple. Bringing transparency to drug pricing and educating the public about the cost of their prescriptions is common sense,” Grassley asserted.

“We’re building on what the pharmaceutical industry is already doing,” he continued. “In their ads, these companies educate consumers on new drugs and their side effects. This bill goes one step further by educating the public on pricing. That’s why there’s a broad coalition of support for this legislation. This is long overdue and will be a great service to health care consumers throughout the country.”

These proposed changes come at a time where patient financial responsibility is increasing. Patients are bearing the brunt of more of their medication costs, either through increased out-of-pocket spending or higher insurance costs.

What’s more, patients are often left unprepared for these higher healthcare bills. Patients often experience “sticker shock” when purchasing their medications, and in many cases must forego their medications or reduce medication adherence to make ends meet.

Potential regulations calling for price transparency in drug advertisements will ideally mitigate that sticker shock, while fostering industry competition and reducing costs.

These price transparency provisions came as a part of the Senate’s “minibus” appropriations, which passed in an 85-7 vote on August 23. The minibus spending package combined proposed spending for the HELP committee and the Defense committee.

In addition to appropriations for military and veteran spending, as well as the price transparency advertising regulations, the minibus includes increased spending on healthcare research conducted by the National Institutes of Health (NIH).

Specifically, the minibus provides funding for Alzheimer’s research, Clinical and Translational Science Awards program, The National Action Plan for Combating Antibiotic-Resistant Bacteria, The BRAIN initiative (Brain Research through Advancing Innovative Neurotechnologies), research as a part of the Precision Medicine Initiative, and The Institutional Development Award (IDeA) program.

The Senate bill awaits discussion in the House of Representatives, which passed its own version of a minibus bill earlier this summer. Debate will follow the House’s current recess.

While portions about defense spending and the price transparency provisions have received bipartisan support and are likely to receive the House seal of approval, the rest of the spending bill may not be a done deal.

Critics say the Senate minibus bill does not do enough to consolidate parts of the NIH and other health-related departments.

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