Bill’s introduction follows GAO report detailing the colossal impact of Pharma direct-to-consumer advertising on Medicare spending
WASHINGTON – US Senate Majority Whip Dick Durbin (D-IL), US Senator Chuck Grassley (R-IA) and the United States. Senator Angus King (I-ME) today presented the Drug Price Transparency Act for Competition (DTC), a bill that would require price disclosure on prescription drug advertisements to empower patients and reduce drug spending. Last week, the Government Accountability Office (GAO) released a report – asked by Durbin and Grassley – who discovered that direct-to-consumer advertising (DTC) of prescription drugs contributes to a huge amount of Medicare costs. More precisely, the DTC Act would require DTP’s ads for prescription drugs and biologics to include list price disclosure, so patients can make informed choices when inundated with drug ads.
âPharma spends $ 6 billion a year to flood the airwaves with advertising that inflates spending by directing patients to the most expensive drugs. These ads bombard you with information but keep patients in the dark about a crucial factor: price. Patients deserve to know the price, and a dose of transparency is the prescription that Pharma needs. I am happy to partner again with Senator Grassley on this common sense policy â, said Durbin.
“Knowing what something costs before buying it is common sense” Grassley said. âDisclosing the list price of prescription drugs in advertisements is a convenient way to empower health care consumers to make informed decisions about their care. It also spurs competition, leading to lower prescription drug costs. “
“For decades, pharmaceutical companies have run advertisements detailing their solutions to serious illnesses – but things get vague when you research the price of a drug,” said the king. âContinuing to advertise these inexpensive drugs creates challenges for patients trying to make informed decisions about their medical care and household budgets. As we seek bipartite solutions to lower prescription drug costs, establishing transparency requirements will help patients understand what they are being sold and give them the ability to shop among competing drug companies.
Each year, the pharmaceutical industry spends $ 6 billion on direct-to-consumer advertising (DTC) advertising to fill the airwaves, so the average American sees nine DTC ads every day. Studies show that these activities direct patients to more expensive drugs, even when a patient may not need the drug or a cheaper generic is available. This practice increases the cost of health care, while undermining the role of providers. For these reasons, most countries have banned advertising of DTP prescription drugs – the United States and New Zealand are the only developed countries that allow this practice.
the DTC Act is approved by: AARP, American Medical Association, American Hospital Association, American College of Physicians, American Academy of Neurology, Public Citizen and Campaign for Sustainable Rx Pricing.
Below are some key findings from the GAO report:
- Pharmaceutical manufacturers spent about $ 6 billion each of 2016-2018 on DTP drug ads (increasing spending year on year), half of which was focused on drugs that treat chronic diseases arthritis, diabetes and depression. Virtually all of the spending was on more expensive brand name drugs.
- Two-thirds of that spending ($ 12 billion out of a total of $ 18 billion) over that three-year period was focused on just 39 drugs, half of which were new to the market. For each of these 39 drugs, their manufacturers spent more than $ 100 million running ads. Humira was the most advertised drug, with $ 1.4 billion in DTC spending over a 3-year window, followed by Lyrica ($ 913 million) and Trulicity ($ 655 million).
- During that three-year period, Medicare spent a total of $ 560 billion on drugs, and 58 percent was spent on advertised drugs.
- The advertised drugs represented 8% of the total Medicare Part D drugs used, but 57% of that spending.
- Of the 10 most expensive drugs for Medicare, four were also in the top 10 for ad spend (Humira, Eliquis, Keytruda, Lyrica).
For years, Durbin and Grassley have advanced legislative proposals to require drug companies to disclose list prices of their prescription drugs when they choose to run DTC ads, including passing a bipartisan amendment by the government. Senate in 2018. US Representative Jan Schakowsky (D-IL-09) has led similar efforts in the past in the House of Representatives.
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