Breaking down an advertisement

June 28, at

Breaking down an advertisement

Causing the debate is a newly proposed rule that would require all pharmaceutical companies advertising drugs paid for by Medicare or Medicaid to list the wholesale acquisition cost for their medications in any advertisements.

This proposed rule comes in the context of soaring pharmaceutical costs. Patient out-of-pocket drug costs are at an all-time highand patients are markedly concerned about paying for those medical bills.

The Administration is trying to address those concerns. Earlier this year, HHS released its drug pricing blue printa document aimed at creating restrictions in the pharmaceutical industry that would ideally make it easier for patients to pay for their drugs.

This most recent proposal aims to build on the blue print and to show constituents that HHS and the rest of the Administration is trying to make progress, according to William Garvin, a healthcare attorney at Buchanan Ingersoll and Rooney.

This is another one of the things he's trying to do to basically show that he's acting on this issue. Building on the philosophy of high-deductible health plans and other forms of patient financial responsibility, the proposed rule could reduce healthcare spending if the patient choosing a treatment that will be less costly to her.

If patients flock to a lower-cost drug option, other companies may develop their treatments at a similar price point. This could have a ripple effect, lowering cost of care across different sectors. Sometimes people are completely uninsured.

Simply showing a patient a wholesale acquisition cost, which is not usually the cost the patient ends up seeing, could cause confusion, pharmaceutical companies have argued. Patient Advocates Call for Drug Price Transparency in HHS Blueprint Additionally, pharmaceutical companies fear patients will be deterred from care if they see a beefy wholesale acquisition cost in a direct-to-consumer advertisement.

Instead, pharma has proposed creating a large resource that would give patients all of the different potential costs for treatment depending on their insurance coverage, Garvin said. HHS does have its understandable reasons for requiring list prices for price transparency, Garvin pointed out.

All pharmaceutical companies are required to calculate their wholesale acquisition costs. This is a standard datapoint that would be easy to include in advertisements.

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And even if the list price is not perfect, it could establish a culture of transparency. These competing arguments came to a head on Monday just hours before HHS released its proposed rule.

Building on the arguments Garvin recounted above, that guidance called on pharmaceutical companies to use direct-to-consumer advertisements to direct patients to online resources for price transparency. It is a step for them to demonstrate patient-centered care and make good on a promise to act on high drug costs.

But a fight awaits, he continued. For the government to actually compel you to speak, they have to have good reasons to do so. And the argument's going to be: The looming debate over this rule may pose a threat to how the rule is eventually carried out, Garvin explained.

The rule may become watered down to the point that HHS does not see worth in enacting it.

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Additionally, there are questions about enforcing the proposal. HHS may be depending on private consumers to bring Lanham Act claims, stating that drug advertisements withholding cost information is false advertising, Garvin offered.

And which everybody could violate it, and there would be no repercussions.

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