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Grassley on Drug Advertising Needing More Daylight

Q: What’s direct-to-consumer advertising in the pharmaceutical industry?


A: Direct-to-consumer (DTC) advertisements market medications and biological therapeutics to U.S. consumers through television, internet and print media. Anyone who watches television likely is able to repeat at least one drug ad from memory. It’s no secret the ads saturate television viewing time — the average American sees nine DTC ads every day. The ads run on repeat by design: to prompt patients to ask their doctors about specific medications. Senator Dick Durbin of Illinois and I wanted to get more facts on the policy table about the impact DTC ads have on prescription drug costs. We asked the nonpartisan Government Accountability Office to examine the relationship between advertised drugs and Medicare spending. The GAO report confirmed our hunch. It found the pharmaceutical industry’s ads may have contributed to increased Medicare Part B and Part D spending, effectively forcing the American taxpayer to pay a premium on advertised drugs. From 2016-2018, Medicare and its beneficiaries spent $560 billion on pharmaceutical drugs. The GAO found 58 percent of those dollars were spent on drugs that targeted American consumers through paid advertising. In that three-year window, the industry spent nearly $18 billion on direct-to-consumer advertising for 553 drugs. The industry focused nearly half of its advertising dollars on drugs to treat chronic medical conditions, such as arthritis, diabetes and depression. The GAO investigation found two-thirds of ad dollars were spent on 39 drugs, with most spent on brand-name drugs. What’s more, among the top 10 drugs with the highest Medicare Part B or Part D spending, four of those were among the top 10 drugs in advertising spending in 2018: Eliquis (blood thinner), Humira (arthritis), Keytruda (cancer) and Lyrica (diabetic pain). For Americans who don’t have these prescription drugs in their own medicine cabinet, many likely would agree they’re household brand names because of the size of their advertising budgets. Consider Humira was the highest advertised drug in the study, with $1.4 billion in DTC spending, followed by Lyrica ($913 million) and Trulicity ($655 million). According to the GAO, direct-to-consumer ads impacted the drugs Medicare patients were prescribed because consumers asked their doctors about the advertised, brand-name drug. It also found drug manufacturer promotions offered to health care providers influenced prescribing decisions, as well.


Q: Why did you reintroduce your Drug-price Transparency for Competition (DTC) Act?


A: As the top ranking Republican on the Senate Judiciary Committee, I’ve teamed up with Chairman Dick Durbin once again to advance our bipartisan legislation through the 117th Congress. Our drug price transparency bill passed the U.S. Senate in 2018. Getting our bill signed into law also would address the court ruling in 2019 that prevented the Trump administration from requiring drug-makers to disclose drug prices in DTC advertising via federal regulation. Sen. Angus King of Maine also has rejoined our efforts to bring in more sunshine into the nation’s DTC drug advertising laws. Federal law already requires DTC ads to disclose potential side effects, for example. Specifically, our bill addresses one of the accelerants fueling sticker shock at the pharmacy counter, thereby forcing taxpayers to pick up higher Medicare costs, as well. Specifically, DTC ads ignite a chain of events that push up drugs prices. Americans pay among the highest prices for prescription medicine in the world. Critics say the practice also undermines the role of health care providers. Our bill would help keep check on surging prices by requiring pharmaceutical companies to disclose the drug’s price in their advertising. Transparency brings accountability. And in this case, price transparency would empower patients to know what the medicine would cost when they consult their providers. Robust competition enables the market to work more efficiently, drive down drug costs and drive up innovation. American consumers are known to drive a hard bargain. With price transparency, patients will be smarter consumers when they talk about treatment options with their health care providers, opening up the conversation about lower-cost generic medicine and other medications. We’ve got grassroots support to help get this legislation enacted into law, including endorsements from the AARP, American Medical Association, American Hospital Association and Campaign for Sustainable Rx Pricing. From cameras in the courts to price transparency in the cattle markets and drug advertising, “sunshine is said to be the best of disinfectants.”


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