CMS Final Rule for Drug Prices in Advertising

A rule proposed in October of last year has become final on May 8, 2019. This rule would mandate that pharmaceutical companies publish the prices of any medication with a list price greater than $35 during television ads.

Pharmaceutical companies tried to push back on this rule stating that listing the prices would confuse patients since what they pay will be different due to insurance coverage, rebates, and discounts. Health & Human Services (HHS) secretary, Alex Azar states, “Claiming list prices don’t matter is almost the same as claiming there is no problem with high drug costs at all.”

In short, according to the rule:

  • There is no specific definition as to how the list price should be included in the television ads.
  • The price must be in a font size and color that is legible.
  • There must be more than just a link to pricing information in the ad.
  • Drug companies are allowed to include verbiage that would indicate insurance coverage and discounts could change the price paid by the patient.

CMS decided to place this rule through themselves, rather than the Food and Drug Administration (FDA), who already regulates ads and cracks down on pharmaceutical suppliers that fail to list all the possible side effects of their drug, as well as other common violations. Secretary Azar felt, “[CMS’] authority with the Social Security Act with Medicare and Medicaid provided the strongest platform and enforcement…”

This rule will go into effect in sixty (60) days. When asked if requiring drug companies to list their prices violates the First Amendment, Azar noted that car dealers are required to post the sticker price for their cars.

We will continue to watch this new Final Rule in the coming weeks to see if big pharma will put any legal measures into place to prevent the rule.




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