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Now that Trump’s forced drug prices into ads, what’s next? Lawsuits and compliance, for two

Donald Trump

The Trump administration ruled to put list prices in TV ads, and the industry reaction ranges from anger to acceptance to agreement. (C-SPAN)

Sorry, pharma. Self-policing didn’t fend off an official rule requiring drug prices in TV ads. And now that the requirement is coming, response from the industry ranges from challenging to cheering—with a few potential lawsuits in the mix.

Last week, the Trump administration said it would in fact require drugmakers put list prices into TV ads, and followed up by publishing the rule Friday in the Federal Register. It’s set to go into effect July 9.

No organization has sued—not yet, at least, because several haven’t ruled it out. The Association of National Advertisers is “seriously considering trying to find a way to block what we think is an unconstitutional proposal by the HHS,” said Dan Jaffe, who heads up ANA’s government relations.

The association is talking to other groups in the industry as it considers a next move, he said, and will likely know which direction they’re going to pursue “in the next week or so.”

The trade group PhRMA is still weighing its options, too. The organization put out an initial statement that echoed its previous stance, saying the rule “could be confusing for patients and may discourage them from seeking needed medical care.” When asked whether the group is considering legal action, Holly Campbell, deputy vice president in public affairs, said, “We are still reviewing the rule, so this is all I can share at the time.”

At least one pharma marketing expert took PhRMA’s confused-patient tack to another level. “Drug prices in TV ads don’t mean a damn thing and may scare patients away from needed prescription drugs to treat health problems. Until we address the lack of transparency around drug costs, adding the list price to ads is like trying to nail jello to the wall,” wrote consultant Richard Meyer on his World of DTC Marketing blog.

GlobalData senior pharma analyst James Mather also cited the murky nature of drug costs and spending as he picked apart the logic of the bill. While it seems to be a sensible approach, he said, the numbers don’t translate into true drug pricing and will cause confusion instead of clarity.

“The intention behind this announcement is clear,” he said. With the move, “Trump is aiming to increase the awareness of high drug prices with the public and apply pressure to companies to lower prices. This short-sighted policy completely ignores one of the core underlying causes of high U.S. drug prices, which is the complex structure of the U.S. healthcare system.”

Meanwhile, the American Medical Association, which has called for a ban on DTC ads in the past, said the rule is “a step in the right direction.”

“This small dose of transparency will help patients have a more complete picture when faced with prescription drug ads,” AMA president Barbara McAneny said in a release. “Patients—especially those who pay a drug’s list price or whose cost-sharing is based on the list price—will now have another tool in their toolbox as they work with their physicians to determine their prescription drug regimens.”

One usually conflicted group that’s largely in favor of the new rule was Congress. Sen. Dick Durbin, D-Illinois, and Sen. Chuck Grassley, R-Iowa, released a bipartisan statement in favor, while a variety of senators and congressional representatives on both sides of the aisle tweeted support for the new rule. Durbin also noted on Twitter that he and Grassley worked to get a similar bill through the Senate in 2018 and will jointly introduce a bill Monday to codify it.

Pharma and healthcare ad agencies will likely bear the brunt of deciphering the new rule and complying with it in creating TV ads.

For instance, one specific detail requires that the price disclosure be in text and use this format: “The list price for a [30-day supply of ] [typical course of treatment with] [name of prescription drug or biological product] is [insert list price]. If you have health insurance that covers drugs, your cost may be different.”

But pharma agencies are used to the highly regulated industry’s requirements and periodic changes to them, and as Leo Tarkovsky, president, McCann Health New York, said, will “do what we need to do for clients.”

“I don’t think we’re fazed or confused or shocked, because if you’re in this business at this particular point in time, you expect that you have to respond to certain developments whether those are regulatory changes, client changes or public discussions,” he said. “It’s our job to figure out communication solutions for our clients and to me that falls squarely in the same bucket.”

Some pharma marketers had already started including list prices and/or links to pricing information. PhRMA members agreed last month to start adding links in ads that would lead to list prices and other detailed cost information, as agreed in the PhRMA DTC Principles announced in October.

Johnson & Johnson was first to add list prices to drug TV ads in February, while Eli Lilly was first to add links to list prices and other detailed cost information in January.