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CMS Ad Drug Price Rule Questioned

Consumers are likely to be confused if the Centers for Medicare and Medicaid Services goes ahead with its rule requiring drug companies to show in TV ads the list price of all medicines covered by Medicare or Medicaid that cost $35 or more for a one-month supply or a full course. That’s the conclusion of an online Forbes article and the experts who spoke to the magazine about the proposal.

The list price is defined as the initial price charged to federal and private insurers and pharmacy benefits managers. “List prices can be vastly different from the average American’s out-of-pocket cost for prescriptions,” the article says.

The problem arises, according to Forbes, because about 91% of Americans have health insurance of some kind and for them the list price is irrelevant. And the Trump administration says that just 47% of Americans have high-deductible health plans requiring them to essentially pay the list price until their deductible is met.

Pharmaceutical Research and Manufacturers of America is protesting the CMS proposal, saying it presents “operational challenges” and may violate companies’ First Amendment right to free speech.

Forbes says that the question of whether forcing drug companies to disclose lower prices will actually result in lower prices, as President Trump has predicted, “is a matter of fierce debate.” A study published in JAMA Internal Medicine found that when consumers were shown ads with price information for fictional drugs, their interest in the most expensive drugs fell by 43%. However, when the ads included language explaining that insurance coverage or discounts would result in lower out-of-pocket costs, demand for the products remained strong.

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