Big Pharma hates proposed Trump rule to display prices in TV ads



The Trump administration is stepping up its attack against Big Pharma, proposing a rule to require pharmaceutical companies to publish the price of their drugs on every advertisement they air on television. The rule would affect any drug that costs more than $35 a month.

“We will not wait for an industry, with so many conflicting and perverse incentives, to reform itself,” Department of Health and Human Services Secretary Alex Azar said, announcing the proposal during a speech at the National Academy of Science, Engineering and Medicine in Washington, D.C. on Oct. 15. “Patients deserve to know what a given drug could cost when they’re being told about the benefits and risks it may have. They deserve to know if the drug company has pushed their prices to abusive levels.”

Pharmaceutical companies have challenged the Trump plan, saying consumers can find the drug prices elsewhere and the list price is generally not reflective of what consumers actually end up paying.

But the Trump administration argues there is value in the list price being published.

[The list price] really matters,” Azar told Bloomberg Television. “And as a result, we think disclosure of those list prices will create a downward pressure on the list prices of those drugs and impact Pharma behavior.”

Azar’s reasoning makes sense. The Big Pharma logic does not hold up. If the list prices are made public every time a commercial airs, companies will be forced to engage in more direct competition. This will necessarily force them to lower their list prices. And despite that not being reflective of what consumers end up paying out of pocket, it will surely ensure consumers pay less.

The Trump administration is taking a unique approach to ensuring drug companies lower their prices. While they have not said they will force companies to lower their prices, they are relying on the market and the principle of competition to drive down prices naturally, allowing this to happen with the least government intervention into private businesses as possible.

While it may take time and a number of lawsuits to ensure the Trump administration’s policy is implemented (companies are arguing that the rule would violate the First Amendment), President Trump has laid down the groundwork for successors to take on Big Pharma as he is.


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