Add “smaller bank account” to the long and often alarming list of side effects required to be disclosed in prescription drug TV advertisements.
In what the Trump administration is billing as a major step toward reining in rising consumer health costs, manufacturers marketing medications costing $35 a month or more will have to include price information in such advertising spots. U.S. Department of Health and Human Services Secretary Alex Azar touted the new rule in a May 8 news conference.
While transparency is always commendable, count the Star Tribune Editorial Board among those skeptical about the price disclosure’s effect on drug affordability, which is why both state and federal lawmakers must continue to pursue additional remedies. One pragmatic concern: How can a patient whose well-being, even life, depends on a drug wield a traditional consumer’s buying power to exert downward pressure on prices?
The drug Keytruda, for example, has a monthly average wholesale price of $8,369, according to Kaiser Health News. It is used to treat a number of cancers, including melanoma and non-small-cell lung cancer, which have challenging survival rates.
Would a patient in the midst of such a health crisis try to negotiate lower prices or even not buy it? Unlikely. That makes this information of dubious value in this scenario. Perhaps patients with less-dire health care needs could act upon this information, but too often, medication alternatives are limited and those in poor health aren’t up to wielding a consumer’s buying might.
One more caveat about the new rule: The bulk of marketing dollars spent by drugmakers is on doctors, not TV ads — roughly $20 billion is aimed at MDs out of $27 billion spent on drug promotional activities in 2016, according to a Quartz news site report. These marketing activities include sending representatives to doctors’ office to pitch the drugs and paying doctors for speaking engagements. These efforts need to be reined in. And because the doctor is the prescriber, it’s an uphill battle faced by consumers who want to switch to less-expensive generic versions of a drug or otherwise wield any leverage that comes from more drug price transparency.
The questionable impact of the federal move contrasts to a worthy drug price reform that cleared the Minnesota Legislature this week and as of press time was waiting for Gov. Tim Walz’s signature. Walz shouldn’t hesitate.
The legislation deals with the so-called drug industry “middle man,” otherwise known as “pharmacy benefit managers,” or PBMs. It has real potential to improve consumer affordability and access to in-network pharmacies and to deliver significant state savings for public medical assistance programs. The bill is the result of several years of hard work in particular by state Sens. Scott Jensen, R-Chaska, and Matt Klein, DFL-Mendota Heights. This session, an influential new champion in the House joined their effort — Rep. Alice Mann, DFL-Lakeville.
PBMs are an under-the-radar component of the drug supply chain. Many employers and insurers, including those paid to run public health care programs, contract with PBMs to administer prescription drug coverage. Two-thirds of the 6 billion prescriptions written annually are processed by PBMs, reports the National Conference of State Legislatures.
There are serious questions about whether PBMs actually save money for consumers or increase costs. One common operational standard: “gag clauses,” which prohibit pharmacists from voluntarily informing consumers that medications would be less expensive if paid for individually vs. processing the claim through insurers, where a copay may be more expensive than the cost of the drug itself.
The Minnesota legislation tackles the gag clause head-on. The new state protections “strengthen and broaden” gag-clause protections passed at the federal level late last year, said Jensen.
The legislation also aids patients who want to “synchronize” their refills, cutting down on trips to the drugstore. In addition, the measure’s new state licensing and reporting requirements will enable state officials to better determine if the state and others working with PBMs are getting a good deal.
Other states have moved more quickly to tighten PBM regulation, with West Virginia announcing this year that PBM reforms had saved state health programs $54 million. Still, the new Minnesota safeguards are a step forward and a testament to politicians’ ability to work together for the greater good.