Whatever the final outcome of pharma’s legal fight over HHS’ price transparency rule for DTC TV, the broader challenge of providing transparency to customers who are demanding it is not going away.
By Wendy Blackburn, executive VP, Intouch Group
Let’s begin with some truth.
True statement no. 1: HHS’ effort to force pharmaceutical companies to include pricing information in DTC ads is not motivated by the noble hope of incorruptible government rescuers protecting unwary consumers from naughty pharma. It’s motivated by a desire to force industry to reduce prices, period, by any means necessary.
True statement no. 2: Exactly no one outside pharma cares about true statement no. 1, and exactly no one is going to shed a tear on our industry’s behalf if we point it out, no matter how loudly we yell.
True statement no. 3: We have a pretty good – somewhere between 50 percent and 99 percent, depending on who you ask – chance of invalidating the HHS pricing transparency rule in court. It’s already been struck down at the district court level, which seems like a positive sign, though the D.C. Circuit Court of Appeals and the Supreme Court still may get a crack at this if the government decides to appeal.
True statement no. 4: Out in the real world, that doesn’t matter much. A 2018 Gallup Poll placed pharma last in approval ratings among all major U.S. industries – we were behind lawyers, oil and gas, and even the rest of healthcare, though at least ahead of the federal government. So leading a lengthy legal battle against the rule just because we don’t want to tell people something that most people actually want to know, even if we win, isn’t going to win over too many hearts and/or minds.
True statement no. 5: Pricing transparency in drug commercials, or in any form of pharma marketing, might not be a bad thing. Properly executed, it might even be a good thing.
And now let’s talk about some options in light of HHS’ actions.
Option no. 1: Stop running TV ads. Some companies and brands were planning to do this whatever the long-term outcome of any litigation or government action might be. TV is so expensive and we have so many other channels at our disposal and most newer brands have to be so narrowly targeted anyway that, well, why bother?
Option no. 2: Challenge the rule in court. Which, of course, is already happening, complete with that aforementioned win at the district court level. HHS may not have the regulatory authority to create and enforce such a rule (the district court’s basis for its ruling), and the government would face a heavy burden if the appeals court judges ever get around to the First Amendment part of the legal challenge, since judges rarely take kindly to rules that require commercial speakers to convey messages on behalf of the government. Or so most of the lawyers I’ve run into have said, though admittedly the lawyers I run into are probably a bit biased in favor of industry.
Option no. 3: Ignore any government threats, keep running ads without pricing information, and see what happens. This seems nuts, but again, a few people I respect and admire have suggested that it’s a real, live option.
Option no. 4: Comply, vigorously. Go beyond the minimum mandate to provide as much useful information as we can, a la Johnson & Johnson with Xarelto or PhRMA’s Medicine Assistance Tool.
And yes, one more.
Option no. 5: A marriage of option no. 2 and option no. 4, with the understanding that we as an industry will take responsibility for communicating truthfully and transparently about pricing, with or without being compelled to do so by government.
As you might have guessed, option no. 5 is my favorite option. Because patriotic claims about the First Amendment and dangerous precedents are all very well, but they won’t change the stark fact that our actual customers frequently lack the answer to what for most customers is a pretty easy question to answer: how much it’ll cost to buy something we are selling. Market research has been telling us for years that consumers and physicians alike crave accurate treatment pricing information. If Amazon and the ice cream truck down the street can find a way to state how much it costs to buy something they are selling, I’m sure with all the brainpower in our industry, we can too.
Yes, of course it’s complicated. Yes, of course the list price isn’t the real price and everyone has different insurance and it’s complicated. Discovering transformative new medicines for deadly disease is pretty complicated too, and somehow we manage to pull that off fairly regularly.
So yes, let’s sue the government. Let’s stand on the principle that federal agencies shouldn’t be forcing commercial entities to say whatever it is the government wants them to say this week or next month or ever. That’s a valid principle worthy of defending. But let’s also give our customers what they want and deserve. Let’s give them as much information as we can, as efficiently as we can. We have the data, and we certainly have the institutional knowledge and technology to communicate broadly and effectively. Let’s use all the tools at our disposal, not only TV but web and video and social media and AI and the sales force providing info to docs and whatever else. Calculating what the vast majority of customers will pay based on their coverages is not as complicated as, say, proving Fermat’s Last Theorem. J&J is doing it for Xarelto; the rest of us can find ways to do it, separately or (even better) together. Let’s stand on principle – but let’s also take some responsibility and actually be as customer-centric as we keep telling ourselves we are.
Because contrary to the popular belief of some, the HHS mandate is not in fact the worst case scenario. The worst case scenario is industry treading water for the next year and a half, and then the next president and next Congress rolling into office with a clear mandate from the voters to lower drug prices by any means necessary, up to and including importation, an international pricing index, and reduced patent protections. Which we all can agree won’t be good for anyone, up to and including the patients who suddenly discover that “big bad Pharma,” with its wings newly clipped, now has less cash to invest in new drug research. That will be the price of our lack of will to act.
The topic of drug pricing as a hot button, including the pricing transparency battle, is not going away. Act, or be acted upon.