Durbin Calls For Transparency From Pharmaceutical Companies in Advertising to Consumers
Senator Also Highlights Increase in Drug Prices and Critical Medicine Shortages
CHICAGO – As the costs of prescription drugs continue to rise under the Trump Administration, U.S. Senator Dick Durbin (D-IL) today sent letters to top pharmaceutical companies urging them voluntarily list the price of their drugs in their advertisments to consumers. At the same time they are dramatically increasing prices on patients and the federal government, the pharmaceutical industry spends more than $6 billion on advertising drugs to consumers and more than $20 billion in aggressive marketing to prescribers. Durbin’s letters come on the heels of legislation he has introduced and recent endorsements from President Trump and Health and Human Services Secretary Azar for requiring price listing in direct-to-consumer prescription drug advertisements.
“Health care is too expensive for too many working families, and the skyrocketing cost of prescription drugs is only exacerbating the problem, causing higher out-of-pocket costs at the pharmacy and ever-rising monthly premiums. Not to mention what these escalating price tags mean for our federal Medicare and Medicaid programs, which are supported with taxpayer dollars,” Durbin said. “One way to promote price transparency is to require drug companies to tell us their prices. Last year, I introduced the Drug-price Transparency in Communications Act, which would require price disclosure in prescription drug advertising. The President says he supports this policy, so let’s get it done.”
Studies show that patients are more likely to ask their doctor for a specific brand-name medication, and doctors are more likely to prescribe one, when they have been marketed directly with drug advertisements. For these reasons, most countries have banned direct-to-consumer (DTC) prescription drug advertising, with the United States and New Zealand being the only two developed countries that allow it. The American Medical Association has called for a ban on DTC prescription drug advertisements, as well as mandatory price disclosure as part of prescription drug marketing. With billions in targeted spending on drug advertisements, patients and doctors are bombarded with information but are kept in the dark on one of the most important factors – the cost of the drug.
The Drug-price Transparency in Communications Act would:
- Require that DTC advertisements disclose the Wholesale Acquisition Cost (WAC) of a drug. Failure to do so would be penalized as a false or misleading statement, resulting in a fine of up to $1 million for a first-time violation that would be transferred to the National Institutes of Health (NIH) for medical research; and
- Require pharmaceutical communications with health care practitioners to include the WAC of the drug. Failure to do so would be penalized as an unfair and deceptive trade practice under an administrative complaint process.
Patients have been dealing with skyrocketing drug costs for years, with 12 of the top 20 drugs paid for by Medicare increasing by 50 percent in the past years—six with price hikes of more than 100 percent. President Trump has promised to bring down drug prices, but since he took office, average drug prices have increased and there have been no new rules implemented to rein in costs. Instead of working to bring down drug costs for patients, President Trump and congressional Republicans gave Big Pharma companies a $40 billion tax break last year.
Since the beginning of 2017, when President Trump took office, the cost of Lyrica, made by Pfizer and used for seizures and pain, has gone up 29 percent—now costing an average of $568 per month. Humira, made by AbbVie and used for rheumatoid arthritis and psoriasis has gone up 19 percent—now costing over $5,500 per month. Xarelto, made by Janssen for blood clots, has gone up 17 percent since last January—and costs $522 per month. More than $100 million was spent on television ads for these drugs last year.
It's not just skyrocketing costs that have harmed consumers. Many patients have faced critical shortages of the medicine they need. For example, life-saving epinephrine auto-injectors like EpiPens were placed on a list of drug shortages by the U.S. Food and Drug Administration (FDA). The FDA previously warned the makers of EpiPens about a problem in following good-manufacturing practices at their facility. In recent years, EpiPen costs have skyrocketed from $100 for a 2-pack in 2007 to over $600 today. Thanks to public outcry, a generic version of EpiPen is currently available for $300.
Durbin sent today’s letters on drug-price transparency to the following pharmaceutical companies, which each spent over $100 million on television advertisements last year for their high-cost medications: Pfizer, Abbvie, Bristol-Myers Squibb, Eli Lilly, Janssen, Merck, Glaxo Smith Kline, and Novartis. Signing on to Durbin’s letter were U.S. Senators Kirsten Gillibrand (D-NY), Maggie Hassan (D-NH), Sherrod Brown (D-OH), and Angus King (I-ME).
Full text of the Senators’ letter can be found here and below (the example is the letter to Pfizer).
May 18, 2018
Chief Executive Officer
235 East 42nd Street
New York, New York 10017
Dear Mr. Read:
The skyrocketing cost of prescription drugs is squeezing American families with high pharmacy and insurance premium costs and straining taxpayers with increased Medicare and Medicaid spending. Three-quarters of the public believe that prices of brand-name prescription drugs are unreasonable, and President Trump has proclaimed that drug corporations are, “getting away with murder.” Last year, we introduced the Drug-price Transparency in Communications Act (S. 2157), which would promote transparency and empower consumers by requiring price disclosure in prescription drug advertising. In light of recent attention and scrutiny of the pharmaceutical industry’s marketing practices, we write to urge you to take an initial step to lower drug spending for consumers by listing the price of your prescription drugs in any direct-to-consumer advertisements.
Each year the pharmaceutical industry spends more than $6 billion in drug advertising—more than the entire budget of the U.S. Food and Drug Administration, which oversees these promotions and the safety of our drug market. The motivation is clear—direct-to-consumer drug advertising increases sales on high-cost, brand-name medications and promotes over-utilization of drugs that may not be necessary for patients. According to the American Medical Association, “direct-to-consumer advertising inflates demand for new and more expensive drugs, even when these drugs may not be appropriate.” That’s why most countries have banned direct-to-consumer prescription drug advertising—the United States is only one of two developed countries in the world in which it is allowed.
With billions in targeted spending on drug advertisements, patients are bombarded with information—an average of 80 prescription drug commercials air every hour on television—but are kept in the dark about one of the most important factors: price. Too often, after seeing an advertisement for a new drug, the “moment of truth” for a patient only occurs at the pharmacy check-out. No other industry shrouds the price of a consumer good in such a way—patients deserve more drug price transparency. When Pfizer spends $1.3 billion each year on its pharmaceutical advertisements in the United States, it should tell the whole story and provide clear information about drug prices, so patients can make informed decisions.
That is why we introduced the Drug-price Transparency in Communications Act, to require disclosure of pharmaceutical prices in direct-to-consumer drug advertisements. The legislation would provide flexibility in how drug companies would specifically disclose the average price to consumers, and we would be eager to discuss the most suitable manner to do so.
We are pleased that the President recently acknowledged the importance of requiring price disclosure on direct-to-consumer ads – it is our hope that he will actually follow through. As an honest first step to the American public, we urge you to immediately and voluntarily commit to transparency and disclose the price of your prescription drugs in direct-to-consumer advertisements.
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