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Drug Companies, Scared of Regulation, Inch Toward Price Transparency

"Our vision for a new, more transparent drug-pricing system does not rely on voluntary action," says HHS Secretary Alex Azar.

DrugPricesRobertByronDreamstimeRobert Byron/DreamstimeHoping to preempt regulatory efforts to mandate drug price disclosures, the Pharmaceutical Research and Manufacturers of America (PhRMA) announced today new voluntary direct-to-consumer advertising principles.

Specifically, all DTC television advertising by drug companies "that identifies a prescription medicine by name should 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." In addition, drug companies will also create a new platform to provide patients, caregivers and health care providers with cost and financial assistance information for brand-name medicines. This won't be too terribly different than the status quo, since it is actually already relatively easy to find pricing information for most drugs online.

The big announcement is a clear effort to throw a bone to politicians and bureaucrats hoping to demagogue the drug price issue in coming elections. The Trump administration and members of Congress have been calling on pharmaceutical manufacturers to reveal the prices of their drugs in their television advertising. In August, the Senate passed a bill that would have provided $1 million for the U.S. Department of Health and Human Services (HHS) to devise and issue a regulation requiring price disclosure. If implemented, the Food and Drug Administration would consider drug advertisements without prices as labeling violations.

"The pharmaceutical industry hates this bill and this amendment like the devil hates holy water. They don't want to tell you what it is going to cost," said Sen. Richard J. Durbin (D–Ill.) in a Senate floor speech in favor of the bill. "We are trying our very best to give the American consumers a break and perhaps to start to slow down the cost of prescription drugs."

In September, the House of Representatives refused to pass the Senate bill, thus killing this legislative effort to mandate drug price transparency.

HHS Secretary Alex Azar was unimpressed by PhRMA's announcement. "Our vision for a new, more transparent drug-pricing system does not rely on voluntary action," declared Azar in a statement. "The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay. So while the pharmaceutical industry's action today is a small step in the right direction, we will go further and continue to implement the President's blueprint to deliver new transparency and put American patients first." HHS is expected to issue new drug price transparency regulations soon.

PhRMA claims to be worried that disclosing the list prices of drugs in their television advertisements would discourage some patients from using medicines that could benefit them and is misleading since most patients don't pay list prices. If HHS does issue regulations mandating price disclosures in DTC ads, the drug companies would likely argue in the federal courts that regulations requiring price disclosures would violate their free speech rights.

Update: HHS Secretary Alex Azar in a speech to the National Academy of Medicine declared that PhRMA's voluntary system is insufficient and that the Trump administration will mandate that list prices be disclosed in all television advertisements for drugs costing more than $35 per month.

"We will not rely on voluntary action to accomplish our goals," said Azar. "We are proposing to require American drug companies, for the first time ever, to include in their TV advertising the list price of any drug paid for by Medicare or Medicaid. Patients deserve to know what a given drug could cost when they're being told about the benefits and risks it may have. They deserve to know if the drug company has pushed their prices to abusive levels. And they deserve to know this every time they see a drug advertised to them on TV."

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  • SQRLSY One||

    Meanwhile, NO ONE is willing to place the finger of blame at the FDA, which requires 300 trillion dollars of studies to PROVE that, before a drug is approved for sale, that NO bunny waaabbits, in this universe or any other of hundreds of billions of other potential universes, will EVER be harmed, by said drug!!!!

  • ||

    NO bunny waaabbits, in this universe or any other of hundreds of billions of other potential universes, will EVER be harmed

    Considering the mixed "It's OK to violate the NAP on this." response to the '3,000 cats in 50 yrs.' article I wish you luck in arguing this angle.

  • SQRLSY One||

    Are you referring (re-furring?) to this? http://sputniknews.com/us/2018.....dead-cats/

    I will have to check it out, I do admit you have my curiosity stoked up... curiosity kills cats, though, right? I'll check it out and see if I can say something snarky or barky or cat-like...

  • SQRLSY One||

    OK, I see it involves the "...Toxoplasma gondii parasite..."

    That is one interesting bacteria! It is passed through cats and manipulates rats (and mice?) behavior so that the rodents do NOT fear cats, but seek them out!!! So that the cats will eat the rodents and pass on the bacteria in cat poop to pass on the disease further! And THEN it is also indicted in human mental illness!

    Call me cruel, but if a few cats die... And I do love and pamper our 2 family cats... But if some cats need to die to help decode the roots of some human mental illnesses, I am on board with it!

    Schizophrenia to be specific...

  • TuIpa||

    "That is one interesting bacteria! "

    No actually, it isn't you fucking retard.

  • SQRLSY One||

    Toxoplasma gondii is an obligate intracellular, parasitic apicomplexan that causes the disease toxoplasmosis.

    Then educate us instead of just name-calling. Googling stuff takes just 3 nanoseconds. The Google knows all. The Google even knows that...

    Get thee behind us, Satulpatanic Satulpan!

  • TuIpa||

    It's not a bacteria you fucking retard.

  • TuIpa||

    "Toxoplasmosis is an infection caused by a single-celled protozoan parasite called Toxoplasma gondii, which usually affects warm-blooded animals, including humans. "

    There, I educated your fucking retard ass.

  • Woody Chip Hurrrrr?||

    "The pharmaceutical industry hates this bill and this amendment like the devil hates holy water. They don't want to tell you what it is going to cost," said Sen. Richard J. Durbin

    well-known proponent of the government telling you what something is going to cost.

  • Rich||

    "Those damn pill-pushers can jolly well take the hit with deficit spending too!"

  • Gilbert Martin||

    "well-known proponent of the government telling you what something is going to cost."

    Like the supporters of Medicare back in 1965 whose claims as to what it would cost was VASTLY understated.

  • SQRLSY One||

    Then there's medical devices as well...

    "The Flute Police", sung to the tune of "Dream Police", by Cheap Trick

    The flute police
    They live inside of my head
    The flute police
    They come to me in my bed
    The flute police
    They're coming to arrest me
    Oh no
    You know that talk is cheap
    And rumors ain't nice
    With my cheap plastic flute
    I don't think I'll survive
    The night the night
    'Cause they're waiting for me
    Looking for me
    Every single night
    (They're) driving me insane
    Those men inside my brain
    The flute police
    They live inside of my head
    The flute police
    They come to me in my bed
    The flute police
    They're coming to arrest me
    Oh no
    Well I can't tell lies
    'Cause they're listening to me
    And when I fall asleep
    Bet they're spying on me tonight,
    Tonight
    'Cause they're waiting for me
    Looking for me

  • SQRLSY One||

    Every single night
    (They're) driving me insane
    Those men inside my brain
    I try to sleep
    They're wide awake
    They won't let me alone
    They don't get paid to take vacations
    Or let me alone
    They spy on me
    I try to hide
    They won't let me alone
    They persecute me
    They're the judge and jury all in one
    'Cause they're waiting for me
    Looking for me
    Every single night
    (They're) driving me insane
    Those men inside my brain
    The flute police
    They live inside of my head
    The flute police they come
    To me in my bed
    The flute police
    They're coming to arrest me
    The flute police (police, police)
    The flute police (police, police)

    (To find precise details on what NOT to do, to avoid the flute police, please see http://www.churchofsqrls.com/DONT_DO_THIS/ )… This has been a pubic service, courtesy of the Church of SQRLS!

  • TuIpa||

    Hey fucking retard, your shitty plagiarism sucks and you were wrong, Toxoplasma gondii isn't a bacteria you fucking retard.

  • chemjeff radical individualist||

    In August, the Senate passed a bill that would have provided $1 million for the U.S. Department of Health and Human Services (HHS) to devise and issue a regulation requiring price disclosure. If implemented, the Food and Drug Administration would consider drug advertisements without prices as labeling violations.

    Wait, what? So Congress allocates money to write a regulation that may not even be implemented?

  • BestUsedCarSales||

    It's only a million dollars. The government could allocate that much money and never even know it.

  • chemjeff radical individualist||

    The amount of waste is just sad.

  • TuIpa||

    No one cares about your adult nickname.

  • SQRLSY One||

    Get thee behind us, Satulpatanic Satulpan!

  • TuIpa||

    Hey, you were wrong. Toxoplasma gondii isn't a bacteria you fucking retard.

  • BestUsedCarSales||

    I'm somehow sadder how little people care. Perhaps we are lucky no one cares though. The opposite is likely that people would demand more money be spent to fix the wasteful spending. And we just spiral further into nothing.

  • Ken Shultz||

    If prices were truly transparent, one of the things people will see is how badly distorted the market is by Medicare and Medicaid programs. It isn't just that the government is arbitrarily setting prices for these things and leaving the private pay system (insurers and people out of pocket) to make up the difference. It's that people are going to freak out thinking that we should all get the same prices as people on Medicaid and Medicare.

    The solution is likely to be worse than the disease--and it's Bailey's dreams of a glorious technological future that may be hit the worst.

    Before the mid-1990s, there was a time when impotence was untreatable. Your options might be a quack psychologist or some new age acupuncturist, but their success rate was pretty bad. Then, one day, Pfizer was testing a Norvasc, a drug for angina, on some frat boys, and someone noticed that they all listed persistent erections as a side effect, and the rest is history. Suddenly, where there had been no treatment before, you could buy an erection for the cost of a pill. Now that's capitalism making America great again!

  • Ken Shultz||

    If politicians are successful in turning this fishing expedition into a witch hunt, investment in pharma research will surely suffer. We may never live to see all the wonderful treatments that we would have enjoyed--if only our politicians hadn't gone after pharma for market distortions that are ultimately caused by things like Medicare and Medicaid. Why is it so hard for people to see that what they're losing in the future?

    I think it's supposed to have something to do with marshmallows.

    http://en.wikipedia.org/wiki/S.....experiment

  • chemjeff radical individualist||

    It's that people are going to freak out thinking that we should all get the same prices as people on Medicaid and Medicare.

    I think you are right about this. I also think that genuine price transparency would be an unintelligible mess.

  • Gilbert Martin||

    It was the creation of Medicare and Medicaid that greatly increased medical cost inflation to begin with.

    I saw a chart of Medical price inflation over time and it was relatively flat until Medicare and Medicaid was enacted and the rate rapidly increased after that.

    And of course government also helps drive up the price by restricting supply and competition - like certificate of need laws.

  • Rich||

    Pharmaceutical Research and Manufacturers of America (PhRMA)

    A goofy moniker from almost every standpoint.

  • Jerryskids||

    OT: Just saw that Paul Allen died. I trust he's still funding cutting-edge research into AI, mapping the human brain, searching for ETI and trying to figure out why the hell the Seahawks let Steve Hutchinson go.

  • Woody Chip Hurrrrr?||

    Don't forget sunk ships.

  • Gilbert Martin||

    I don't know why drug prices should be particularly singled out as being non transparent.

    They are no more non transparent than the prices for anything else in the medical industry.

    The prices of X-rays, MRI's, blood tests, etc, etc. are no more transparent that drug prices are.

  • Kivlor||

    Less of an argument against demanding price transparency in pharma than it is an argument in favor of demanding it for the entire medical industry, don't you think?

  • Gilbert Martin||

    I'm not making an argument against price transparency.

    I'm pointing out that singularly focusing on the drug industry is more of a political calculation rather than one of substance regarding the overall medical industry.

  • Angelique||

    Maybe because the drug industry if VERY unpopular at the moment.

    When several pharma executives admitted in court that they KNEW that oxycotin was addictive, as they aggresively marketed among doctors as non-addictive, the industry should be thankful that we do not lynch them.

  • Diane Reynolds (Paul.)||

    Paul Allen dead at 65.

  • Sarah Palin's Buttplug||

    One less liberal for wingnuts to call a "socialist".

  • TuIpa||

    You give Cry More Cathy a run for his money with your sad fucking whining. Suck more liberal dick and use the money to pay your bet you low rent piece of shit.

  • Echospinner||

    The Aetna CVS merger will have more impact than any of this. Now Amazon is getting into the business. Cigna has already merged with the largest pharmacy benefits manager in the country.

    CVS already has their minute clinics, they are planning to add lab testing and other services.

  • Angelique||

    I am confused.

    Isn't transparent pricing good for the market, as it allows the consumer to make rational decisions as to what and where to shop?

  • Robert||

    Only if it's pricing they can get.

  • TuIpa||

    Fuck off Hihn.

  • Sevo||

    Angelique|10.15.18 @ 10:35PM|#
    "I am confused.
    Isn't transparent pricing good for the market, as it allows the consumer to make rational decisions as to what and where to shop?"

    No, you're not confused. You're a trolling asshole.
    Pharm costs are largely driven by regulation. If the pharm companies were to point that out, the gov't would scream bloody murder and demand every one of the CEOs be called before the collection of idiots and be grilled by same.
    Ah, and fuck off, Angelique, you pathetic piece of shit.

  • Angelique||

    Sevo:

    If you are the typical liberatarian I can see no point in dealing with uneducated children.

    I found out that when confronted with disconcerting facts, the response is "you are a...." just like a toddler.

    I find that too many libertarians are ill informed about the world around them, and they tend to read the same literature which keeps telling them what they have already been told. They do not seem to have the curiosity to go finding more about the subjects in discussion. I try to bring in that information, telling them, as much as possible where to find it (I wish that links could be put in the comments). If the facts I uncovered clash with your beliefs, it is up to you to do your research, and, disprove it, make it fit into your worldview, decide that your worldwiew needs refining. But first DO YOUR RESEARCH. In the age of Google there is no excuse not to do it

  • Robes Pierre||

    Sevo, and the vast majority of people who comment at Reason, aren't libertarian. I believe most of the to have been hired by the Republican Party to scare people away from libertarianism by convincing them that libertarians are all low-IQ, uneducated sociopaths. They have done such a good job that no libertarians comment here anymore. Which means that these plants now mostly amuse each other by trying to out-jerk each other.
    If you want an honest discussion of anything libertarian, don't bother posting here.
    As to your original question, yes, price transparency is a keystone to the free market. Libertarians always support price transparency.

  • Angelique||

    Robes Pierre

    Thanks for the clarification. Even so, I sometimes suspect that Libertarians should read more about the world around them, instead of regurgitating talking points. For example, you can make an impassioned discussion about the words of Mussolini "all for the State, nothing above the State, nothing outside the State", but knowing something of Italy you might suspect that his words were just a pious hope in a country where a guard supposed to be guarding a prisoner, decides to go visit his wife, instead, after begging the other guard AND the prisoner, not to denounce him.

    Also, the constant denouciations about global warming makes them miss the cutting edge technology involved in renewable energy. Like Ayn Rand who bases her future on fifties technology, they seem too enamored of old technology to learn about the new.

    In short, they need some education.

  • SIV||

    Yes, it is

  • JFree||

    Transparent drug pricing won't do a damn thing as long as insurance is the main payer of medical expenses. But it's always good to see pols and pharma arguing about the irrelevant.

    In far more disturbing news - climate change means beer prices would double with supply dropping by 16%.

  • BestUsedCarSales||

    Oh no! That means the new 77 pack of Natty Light would only have 66 or so!

  • SIV||

    The climate change beer scare is about barley yields. I'm not sure Natty Light even contains "artificial barley flavor".

  • Echospinner||

    There will be no transparent pricing.

    The drug company, any of them can set a dollar number per pill for...hepatitis. It means nothing. They will never be able to sell it at that level. It will never be a box of cornflakes.

    It is fine to tackle cost control from the buyer side. It has been going on and the current government has not changed things much.

    Small government means getting out of this business as much as possible.

    Who controls the food into New York City.

  • markm23||

    This is government action proposed to attempt to correct one of many bad results of prior government actions. When people pay for something themselves, they'll demand to know the price in advance. When they pass the bill to a third party, they don't care. And thanks to 70 years of regulation and tax policy, most drugs and almost all medical procedures are paid for by insurance or a government agency. They don't need to put a price tag on drugs - especially those advertised on TV, which you already know are too expensive if your insurance won't cover it - because the consumers don't care.

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