Chicago Medical Society Backs New Legislation

Chicago Medical Society

Contact: Theodore Kanellakes

312-953-3154

tkanellakes@cmsdocs.org

Read Full Senator Durbin's Office Press Release Here

Chicago Medical Society Backs New Legislation to Require Disclosure of Drug Prices in Advertising

The Chicago Medical Society is giving its strong support to legislation introduced by U.S. Senator Richard Durbin on Nov. 15. The Drug-price Transparency in Communications (DTC) Act of 2017 requires the pharmaceutical industry to provide more information about the cost of drugs in their advertisements. Specifically, the bill requires drug companies to disclose the Wholesale Acquisition Cost (WAC) of a prescription medication in direct-to-consumer (DTC) advertising and in marketing to prescribers.

CMS commends Senator Durbin for taking the lead on this urgent issue. Soaring prescription drug prices are cited as the number one driving force behind rising healthcare costs. Price increases have an impact on public and private employers, translating into rising deductibles, job loss, and bankruptcy.

The Durbin proposal mirrors recommendations adopted by CMS and it aligns with testimony by CMS leadership before the Chicago City Council Finance Committee, which is considering a local ordinance against prescription price gouging. CMS stands ready to assist legislators in enacting laws that bring public scrutiny to unscrupulous price manipulation and unjustified increases.

Specifically, the Drug-price Transparency in Communications (DTC) Act of 2017:

*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.

*Directs the FDA to issue regulations on the specific manner in which the per-month WAC must be disclosed, which will include a single price, visual and audio listings, and may include a brief qualitative explanation that the drug may be available to certain patients for less.

*Requires pharmaceutical communications with healthcare 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.

The high price of prescription drugs is hurting Chicago’s employers, patients and taxpayers. Studies show more than half of U.S. patients cite rising costs as the reason they are not filling their prescriptions, CMS President Dr. Vemuri Murthy said.

To address the problem of rising prescription drug costs, CMS recently approved measures that bring attention to Pharmacy Benefit Managers (PBMS) and allow patients to import medications from Canada.

Each year, the pharmaceutical industry spends more than $5 billion in DTC prescription drug advertising and more than $20 billion in aggressive marketing to prescribers. In 2015, the drug industry spent more than $100 million in direct-to-consumer advertising for each of the top 16 brand-name prescription drugs.

The Chicago Medical Society was founded in 1850 upon a mission to promote public health and wellness and to set educational standards for physicians. For decades, the Chicago Medical Society has been a leader in public health laws at the city, county and state levels.

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***FTP, VIDEO & AUDIO***

DURBIN: NEW LEGISLATION WILL REQUIRE DISCLOSURE OF DRUG PRICES IN ADVERTISING

Drug Advertising Steers Patients Toward Expensive Drugs, Drives Up Health Care Costs

Drug Industry Spent More Than $100 Million in Direct-to-Consumer Advertising for Each of the Top 16 Brand-Name Prescription Drugs in 2015

WASHINGTON—In a speech on the Senate floor, U.S. Senate Democratic Whip Dick Durbin (D-IL) today previewed new legislation, which will be introduced this week, that will empower patients and promote transparency by requiring the pharmaceutical industry to provide more information about the cost of drugs in their advertisements.  The Drug-price Transparency in Communications (DTC) Act of 2017 would require drug companies to disclose the Wholesale Acquisition Cost (WAC) of a prescription medication in direct-to-consumer (DTC) advertising and in marketing to prescribers.  Each year, the pharmaceutical industry spends more than $5 billion in DTC prescription drug advertising and more than $20 billion in aggressive marketing to prescribers.

“Every hour on television, an average of 80 drug ads are aired.  The average American sees nine of these pharmaceutical ads every day.  In fact, drug companies spend more each year on advertising than the entire budget of the Food and Drug Administration.  As common as these direct-to-consumer ads are, drug companies spend four times as much as the cost of these ads on an army of sales representatives who target doctors who write prescriptions,” said Durbin.

He continued, “Why do the biggest pharmaceutical companies in America spend billions of dollars to promote and advertise their drugs?  For one reason: it increases sales.  It increases profits.  So I’m introducing a bill – The Drug-price Transparency and Communications Act – to require the disclosure of prices in direct-to-consumer ads and promotions to doctors.  Doctors, patients, and families agree – if drug makers are going to fill the airwaves with pharmaceutical ads, they must tell the whole story and provide full information about drug costs.”

Video of Durbin’s remarks on the Senate floor are available here.

Audio of Durbin’s remarks on the Senate floor is available here.

Footage of Durbin’s remarks on the Senate floor is available here for TV Stations.

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 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.

Specifically, the Drug-price Transparency in Communications (DTC) Act of 2017:

• 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

• Directs the FDA to issue regulations on the specific manner in which the per-month WAC must be disclosed, which shall include a single price, visual and audio listings, and may include a brief qualitative explanation that the drug may be available to certain patients for less.

• Would 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.

The Drug-price Transparency in Communications Act of 2017 is endorsed by: American College of Physicians; Consumers Union; and Chicago Medical Society.