New CMS Rule Would Require Drug Companies to List Price in TV Ads


August 20, 2019

One in five Americans will go without the health care he needs because he can’t afford it. To decrease the out-of-pocket cost for patients, the federal government wants to make drug companies include in television ads the price of drugs and biological chemicals covered by Medicare and Medicaid. Pharmaceuticals companies, who say the law interferes with their right to free speech, want to implement their own plan. Currents laws require commercials to list side effects but not cost.

The new regulation, an offshoot of the American Patients First Blueprint, would require drug companies to show the cost of a 30-day supply for chronic illnesses, like diabetes, or a routine round of medication, like antibiotics for infections. The information would show up on the top of the commercial, and the Department of Health and Human Services would monitor offenders. Drugs that cost under $35 per month would be exempt. 

Other initiatives of the “blueprint” include improving competition among drug companies, offering incentives to companies that lower drug prices, encouraging price negotiations and lowering costs to consumers. The Centers for Medicare and Medicaid Services is deciding if the rule will apply only to television or if it will also be a requirement for social media, radio, newspapers and magazines.

Health and Human Services (HHS) Secretary Alex Azar also wants to transfer some drugs paid for by Medicare Part B to Medicare Part D, the private drug portion of Medicare that allows more competition than the federally funded Part B. While that might lower costs for some patients, it could also cause a backlash from pharmaceutical companies who want to protect their profits. The new rule would not apply to over-the-counter medications covered by Medicare.

Even with prescription drug coverage, patients must pay full price for any drug that is not on their formulary – the official list of covered drugs provided by an insurance company – and list prices determine which drugs go on the formulary list. According to HHS, the 10 most commonly prescribed drugs in the United States range from $550 to $11,000 per month. People need to know the cost before it’s time to pay.

HHS Secretary Azar says that putting cost-related information on an independent website is not the same as listing it on advertising. Drug companies argue that disclosing the price of expensive treatments might discourage people from seeking the care they need.

The proposal to include pricing in TV ads has received bipartisan support. A poll by the Kaiser Family Foundation reported that 76 percent of Americans approve of the plan. There is also agreement among legislators and patients that rebates, which are payments made to employers, state and federal government, and other pharmacy benefit managers, require examination and transparency. Experts say few of the benefits from rebates change out-of-pocket costs for consumers.