October 15, 2018 Press Releases

MEMO: Disclosure of Drug Prices in Direct-to-Consumer Advertising

TO: Interested Parties
FROM: Ben Wakana, Executive Director, Patients For Affordable Drugs
RE: Disclosure of Drug Prices in Direct-to-Consumer Advertising
DATE: October 15, 2018Patients For Affordable Drugs supports the administration’s efforts to require disclosure of drug list prices in direct-to-consumer ads, but we do not think it will lower prices. Instead, we support the recommendation of the National Academies of Sciences, Engineering, and Medicine to eliminate the tax deduction drug companies take on DTC ads. This will likely reduce use of the ads, lower prices by reducing overhead, and lower demand for unnecessary drugs, and thereby reduce costs to the government, employers, taxpayers, patients, and consumers overall.Americans subsidize an estimated $6 billion a year in drug company ads. It’s time for patients and taxpayers to stop subsidizing the marketing budgets of drug corporations and start seeing lower prices.In light of today’s announcements, it’s important to keep three facts in mind:

1. Disclosing list prices in ads does not lower drug prices: There is no evidence that providing patients and consumers access to list prices will result in lower prices for prescription drugs. The focus on price disclosure is a distraction from additional action that would benefit people –– lowering prices.

2. Don’t fall for Big Pharma’s fake overture: In a transparent attempt to preempt full disclosure of list prices in ads, PhRMA began a propaganda campaign to control the information consumers see and keep prices high.

PhRMA did not agree to disclose its prices in ads. Instead they offered to direct consumers to company-run websites. The drug companies will control information listed on those websites — including how information is presented, the prices shown, and who is to blame for the outrageous prices. PhRMA says it will explicitly include information on co-pay support, which is used as a tax-deductible vehicle to raise prices and increase sales. Co-pay support is not available to Medicare beneficiaries because it is considered an illegal kickback under law, and we expect PhRMA will use this tactic to stoke support for expansion of co-pay support. We should be lowering prices and eliminating the need for co-pay support.

The PhRMA plan appears to cover only TV ads, not digital or print ads –– more obfuscation and deceit from Big Pharma.

PhRMA’s internal poll showing support for its cherry-picked approach is laughably skewed. The lobby group’s claim that voters prefer more information to less information is obvious, but it’s based on a false choice. PhRMA should have asked if voters prefer more information or lower prices. Big Pharma’s non-disclosure announcement is more about obscuring list prices and less about lowering drug prices.

3. More meaningful action is necessary: If the Administration, PhRMA, and Congress want to lower drug prices, they should follow the recommendation of the National Academies of Sciences, Engineering, and Medicine and eliminate the tax deduction for DTC prescription drug ads. This will reduce drug corporation overhead and pave the way to lower prices, saving everyone money.



Patients For Affordable Drugs is the only independent national patient organization focused exclusively on achieving policy changes to lower the price of prescription drugs.