[Ip-health] Wall Street Journal: Drugmakers Sue to Block Federal Rule Requiring Drug Prices in TV Ads

Thiru Balasubramaniam thiru at keionline.org
Mon Jun 17 22:37:28 PDT 2019



Drugmakers Sue to Block Federal Rule Requiring Drug Prices in TV Ads

Lawsuit says rule will create unnecessary confusion, may discourage
patients from seeking treatment or medical information

By Jared S. Hopkins
June 14, 2019 5:57 p.m. ET

Three pharmaceutical companies sued the federal government Friday to block
a proposal requiring drug manufacturers include the list price of
prescription drugs in television ads, the latest volley by the industry as
it faces criticism over escalating cost of its products.

The lawsuit against the U.S. Centers for Medicare and Medicaid Services,
filed jointly in U.S. District Court by Amgen Inc., Merck  & Co., Eli Lilly
& Co. and the Association of National Advertisers, alleges that the
proposed rule violates the First Amendment by compelling drugmakers to
communicate list prices in TV ads.

The companies and trade organization allege the agency lacks the authority
to enact the mandate, according to the complaint. And they say the rule
will create unnecessary confusion among patients and may discourage them
from seeking treatment or medical information. The complaint says that few
of the 65 million Americans on Medicaid pay more than an $8 copay for
prescription drugs.

The proposed rule was finalized in May by the U.S. Department of Health and
Human Services and is set to take effect in July. It is among the efforts
by the Trump administration to make health care more affordable in the
U.S.Officials also want to stop billions of dollars in annual rebates that
drugmakers give middlemen in Medicare that are known as pharmacy-benefit

The government has said the proposed rule would increase transparency
around prices and allow patients to make informed decisions based on cost.
Government officials also have said the rule could spur drug companies to
reduce prices.

President Trump and Health and Human Services Secretary Alex Azar are
committed to providing patients the information they need to make their own
informed health-care decisions, agency spokeswoman Caitlin Oakley said in
response to the lawsuit. “If the drug companies are embarrassed by their
prices or afraid that the prices will scare patients away, they should
lower them,” she said.

The lawsuit wasn’t entirely a surprise given the resistance the industry
signaled last year when the rule was proposed. The Pharmaceutical Research
and Manufacturers of America—the industry’s main trade group, or PhRMA— had
said the rule could lead some patients to think they have to pay the full
list price, rather than a copay or coinsurance if they have insurance.

The trade group announced its own initiative in which major drugmakers
would voluntarily include price-related information in television ads by
directing consumers to websites where they can find information on list
prices and costs. Few patients pay “list” prices, which don’t take into
account rebates, discounts and insurance payments, but some pay the full
price at times, such as when they haven’t met their deductible.

Johnson & Johnson , the world’s largest health-care company, adopted the
PhRMA principles but went a step further. The New Brunswick, N.J.-based 
firm has been airing a television ad for its Xarelto blood thinner by
briefly showing its list price at the end of the ad.

Pharmaceutical ads on television have become a common occurrence since they
began airing two decades ago. The spots have also become a lightning rod in
attacks on the drug industry, its marketing and pricing. Critics say the
commercials encourage use of expensive medicines, when less-costly generics
may suffice.

Indianapolis-based Lilly said in a statement that it has already taken
steps in its TV ads and website to share more pricing information. It said
focusing on the list price “creates confusion because it’s not the price
most patients will pay.”

Merck, which is based in Kenilworth, N.J., said in a statement that the new
requirements may cause patients not to seek treatment because of a
perception they can’t afford treatments.

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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