President issues executive order to boost competition and lower drug prices
U.S. Sen. Dick Durbin, D-Illinois, is urging passage of bipartisan legislation he introduced last month to address the high cost of medicines by requiring price disclosures on advertisements for prescription drugs.
Durbin held a virtual news conference this month with A.J. Wilhelmi, president and CEO of the Illinois Health and Hospital Association, and Rosanna Marquez, state president of AARP Illinois.
“Over the course of the pandemic, many Americans spent more time at home watching television. And what was one of the most common commercials they saw? Direct-to-consumer drug ads. Even before COVID, Americans saw an average of nine ads a day,” Durbin said. “Every year, Pharma spends more than $6 billion to flood our airwaves with drug ads. With billions in targeted spending, patients are bombarded with information, but kept in the dark on one crucial factor—the price. I think it’s time Pharma ends the secrecy and tells patients the price of the drug right there in the commercial.”
The Drug-price Transparency for Competition (DTC) Act, which is also sponsored by U.S. Sen. Chuck Grassley, R-Iowa, and U.S. Sen. Angus King, I-Maine, would require DTC advertisements for prescription drugs and biological products to include a disclosure of the list price so that patients can make informed choices amid an onslaught of drug commercials. Last month, a Government Accountability Office report—requested by Durbin and Grassley—found that direct-to-consumer advertisements of prescription drugs contribute to an enormous amount of Medicare costs.
Studies show that pharmaceutical industry spending on direct-to-consumer (DTC) drug advertising steers patients to more expensive drugs, even when a patient may not need the medication or a lower-cost generic is available. This practice drives up the cost of health care, while undermining the role of providers. For these reasons, most countries have banned DTC prescription drug advertising—the United States and New Zealand are the only developed nations to permit this practice.
President Biden recently announced an executive order to direct the Federal Trade Commission to promote the use of generic drugs by addressing “pay-for-delay” deals with brand manufacturers—where brand companies pay generics to stay off the market — and direct the U.S. Department of Health and Human Services to work with states on plans to import drugs from Canada. The executive order is part of a broader focus on competition and addressing monopolies across industries.
The DTC Act is endorsed by: AARP, American Medical Association, American Hospital Association, American College of Physicians, American Academy of Neurology, Public Citizen, and Campaign for Sustainable Rx Pricing, Blue Cross Blue Shield Association.
Below are some key findings from the GAO report:
· Pharmaceutical manufacturers spent approximately $6 billion for each of the years 2016-2018 on DTC drug advertisements (increasing spending each year over year), half of which was concentrated among drugs that treat chronic conditions of arthritis, diabetes, and depression. Virtually all spending was for more expensive, brand-name drugs.
· Two-thirds of this spending ($12B out of $18B total) over this three-year period was concentrated on just 39 drugs, half of which had newly entered market. For each of those 39 drugs, their manufacturers spent over $100 million to run commercials. Humira was the highest-advertised drug, with $1.4 billion in DTC spending during three-year window – followed by Lyrica ($913 million), and Trulicity ($655 million).
· During this three year period, Medicare spent a total $560 billion on drugs, and 58 percent were on drugs that were advertised.
· Advertised drugs accounted for 8 percent of total Medicare Part D drugs used but 57 percent of that spending.
· Among the top 10 drugs with the highest cost to Medicare, four were also in the top 10 for advertising spending (Humira, Eliquis, Keytruda, Lyrica).
For years, Durbin and Grassley have advanced legislative proposals to require pharmaceutical companies to disclose the list prices of their prescription drugs when choosing to run DTC advertisements, including passing a bipartisan amendment through the Senate in 2018. U.S. Representative Jan Schakowsky (D-IL-09) has led similar efforts in the past in the House of Representatives.
PHOTO: Richard Durbin, file.