Legal and Public Health Issues in Drug Advertising Pricing Examined
Direct-to-consumer television advertising may not be the best place to provide cost information on prescription drugs and biologic products.
Direct-to-consumer television advertising may not be the best place to provide cost information on prescription drugs and biologic products, according to an opinion piece published in the New England Journal of Medicine.1
In October 2018, the Centers for Medicare & Medicaid Services proposed a rule requiring television advertisements for prescription drugs and biologic products to disclose the products' wholesale acquisition cost for 1 month's supply or a typical course of treatment. On the surface, this appears to be a positive development, and a recent poll showed that 76% of Americans are in favor of requiring drug advertisements to include drug pricing information.2
However, authors Stacie B. Dusetzina, PhD, from the Department of Health Policy at the Vanderbilt University School of Medicine in Nashville, Tennessee, and Michelle M. Mello, JD, PhD, from the Stanford Law School and the Department of Health Research and Policy at Stanford University School of Medicine in California, suggested that this proposed rule raises a number of concerns in both the public health and legal arenas.
The authors believe that although the Centers for Medicare & Medicaid Services proposal points toward a desire to retain the benefits of direct-to-consumer advertising while limiting its undesirable effects, a number of unintentional consequences exist, such as that some individuals may be deterred from seeking care because they may erroneously perceive that they cannot afford treatment.
The authors pointed out that wholesale acquisition cost rarely reflects the cost that patients pay, particularly those patients with insurance. The wholesale acquisition cost, however, does provide a good approximation of what uninsured patients will pay, and deductibles and coinsurance are often based on the wholesale acquisition cost. Moreover, having to disclose list price may serve as a brake on price increases.
The authors also noted that this proposed regulation may not survive legal challenges based on First Amendment commercial speech rights that limit compelled disclosure in advertising. Although the Zauderer standard allows for factual, uncontroversial disclosure, this regulation would probably not pass a Zauderer review, as key information is omitted. The authors feel other standards would be equally difficult to employ, as the wholesale acquisition cost does not represent actual costs for many patients, and therefore can be misleading.
The authors wrote that a better alternative would be to make patient-specific cost information available at the point of prescribing. They further argued that cost should be a standard part of treatment discussions with patients. Although they support the desire to reduce drug spending, they maintained that direct-to-consumer advertising is not the place to do it.
- Dusetzina SB, Mello MM. Disclosing prescription-drug prices in advertisements — legal and public health issues. N Engl J Med. 2018;379:2290-2293
- Kirzinger A, Wu B, Brodie M. Kaiser health tracking poll — June 2018: campaigns, pre-existing conditions, and prescription drug ads. June 27, 2018. https://www.kff.org/health-costs/poll-finding/kaiser-health-tracking-poll-june-2018-campaigns-pre-existing-conditions-prescription-drug-ads/. Accessed December 17, 2018.