The U.S. Department the Health and Human Services (HHS) has finalized the Centers for Medicare & Medicaid Services (CMS) rule requiring drug companies to disclose the list price of drugs in direct-to-consumer television (DTC) advertisements.
The rule is part of the administration’s American Patients First Blueprint designed to lower drug prices.
The final CMS rule requires drug companies to include the list price, also known as the Wholesale Acquisition Cost, of prescription drugs and biologics covered by Medicare or Medicaid in DTC television ads if that list price is $35 or more for either a month’s supply or the usual course of therapy, whichever is more appropriate.
The list price is determined on the first day of the quarter during which the advertisement is aired.
Television ads include those airing over broadcast, cable, streaming and satellite.
The rule requires ads to include the following disclosure statement: “The list price for a [30-day supply of] [typical course of treatment with] [name of prescription drug or biological product] is [insert list price]. If you have health insurance that covers drugs, your cost may be different.”
The disclosure must appear clearly at the end of the advertisement – “meaning that it is placed appropriately and is presented against a contrasting background for sufficient duration and in a size and style of font that allows the information to be read easily.”
The final rule will go into effect July 9, 2019, 60 days after its May 10 publication in the Federal Register.
The rule has no specific enforcement mechanism, but provides the HHS Secretary will maintain a public list of drugs advertised in violation of these requirements.
According to the summary of the rule, CMS expects the primary enforcement mechanism is “the threat of private actions under the Lanham Act sec. 43(a), 15 U.S.C. 1125(a), for unfair competition in the form of false or misleading advertising.”
The new rule will impact manufacturers’ advertising and compliance as it relates to DTC product advertisements. Given the 60-day window for the rule to go into effect, manufacturers will need to act fast.