A Trump administration proposal requiring the list prices of prescription drugs to be displayed in TV ads is already getting action. No, not from Congress — but from pharmaceutical companies.
Johnson & Johnson announced last week that it will start showing the list price of its prescription drugs in TV ads. Last month, drugmaker Eli Lilly started including prices in its ads for diabetes medicine Trulicity.
This is significant because Big Pharma, which includes Johnson & Johnson and Eli Lilly, has opposed this proposal. The pharmaceutical industry argues that few people pay the list prices.
While that is true, since many people have insurance coverage and discounts are available, it nevertheless establishes a baseline for consumers to judge whether they are getting a reasonable price when they buy the drug.
Establishing a public price for the drug in advertising should make prescription pricing more competitive and, ultimately, reduce prices.
The drug companies are going to want to display prices that consumers will see as reasonable so they will ask their doctor to prescribe that drug.
It’s likely Johnson & Johnson and Eli Lilly voluntarily started putting pricing in their ads in the hope that it will sway Congress to not take action.
Johnson & Johnson officials said it would start posting the list price with its blood thinner, Xarelto. The commercials will give the list price plus typical out-of-pocket costs. The information will appear on screen at the end of the commercial.
Big Pharma isn’t likely to get a pass from Congress unless every company is transparent on pricing and remains so year after year.
The public outrage has been building for years — and with good reason — over the sky high prices of prescription medications. It’s going to take some doing for Big Pharma to convince consumers its prices are fair.
If the companies come up short, Congress could crack down.
Last year the Oregon Legislature sent a shot across the bow to the drugmakers. State lawmakers approved a new law mandating drug companies divulge development costs for their most expensive products. In addition, it calls for disclosing the costs for manufacturing, marketing and distributing prescription drugs, and previous-year revenues. Companies that don’t comply can be fined up to $10,000 per day.
This is exactly the kind of action that Congress could approve to force drug costs down.
Until then, the Trump administration proposal, which has already ignited action, is a step forward.