Drug Manufacturers Spend $6 Billion Each Year on Direct-to-Consumer Pharmaceutical Advertising — Often Steering Patients to More Expensive Drugs

WASHINGTON, D.C. — U.S. Representatives Abigail Spanberger (D-VA-07) and Zach Nunn (R-IA-03) today introduced bipartisan, bicameral legislation to require pharmaceutical companies to disclose the price of their drugs on advertisements.

Advertising expenses by drug manufacturers have more than quadrupled over the past two decades — rising from $1.3 billion spent on 79,000 ads in 1997 to $6 billion spent on 4.6 million ads in 2016. According to the Government Accountability Office (GAO), prescription drugs advertised directly to consumers account for 58 percent of Medicare’s spending on drugs. As a result, an American sees an average of nine pharmaceutical advertisements each day — often steering patients to more expensive drugs, even when a low-cost generic is available. Most countries have banned direct-to-consumer prescription drug advertising altogether — the United States and New Zealand are the only two countries in the world that allow direct-to-consumer pharmaceutical advertising.

The bipartisan Drug-Price Transparency for Consumers Act would require that direct-to-consumer advertisements for pharmaceuticals include a disclosure of pricing information. Specifically, the legislation would amend the Social Security Act to allow the Secretary of the Department of Health and Human Services (HHS) to require that pharmaceutical advertisements disclose the wholesale cost for a 30-day supply or typical course of treatment of the drug, clearly present the price information, and explain that pricing may vary depending on insurance coverage. Additionally, the bill would subject advertisers to a penalty of up to $100,000 for each violation.

“Multinational pharmaceutical companies spend billions of dollars each year encouraging patients to spend more money than necessary on drugs — just to line their pockets,” said Spanberger. “Requiring advertisers to disclose the price tag on the drugs they are steering patients toward would hold drug companies accountable for skyrocketing drug costs and empower consumers to make informed decisions about their care. Virginians and Americans across the country deserve this information, and I’m proud to work with Representative Nunn to bring a healthy dose of transparency and common sense to the pharmaceutical industry.”

“Iowa families are struggling to afford necessary health care due to out-of-control prescription drug prices,” said Nunn. “Iowans deserve to know what they’re paying before they agree to a plan of care and right now, the lack of transparency doesn’t make it easy. This legislation will create critical transparency in drug pricing that will hold the drug companies accountable and allow patients, families, and providers to make the best decision for their health.”

U.S. Senators Dick Durbin (D-IL) and Chuck Grassley (R-IA) lead the U.S. Senate version of the Drug-Price Transparency for Consumers Act.

The bipartisan, bicameral Drug-Price Transparency for Consumers Act is supported by the American Medical Association (AMA), American Academy of Neurology, Senior Citizen’s League (TSCL), Campaign for Sustainable Rx Pricing, Blue Cross Blue Shield Association (BCBSA), National Center for Health Research, Patients for Affordable Drugs Now, and Public Citizen.

“Big Pharma spent more than $8 billion last year on direct-to-consumer (DTC) advertising pushing sales of high-priced blockbuster products,” said Lauren Aronson, Executive Director, Campaign for Sustainable Rx Pricing (CSRxP). “Requiring Big Pharma to disclose list prices in DTC ads will increase transparency in the prescription drug market, help serve as a deterrent to egregious price-gouging and arm patients and providers with useful information for considering the best treatment options for individual health care needs.”

“It is time to give patients the clear information required to make informed decisions about their health. Critical medical decisions should always be made between a patient and their doctor — not between a patient and their television screen,” said Edward Cates, Chairman, the Senior Citizens League. “TSCL applauds Representative Spanberger for introducing the Drug-Price Transparency for Consumers Act, is pleased to endorse the bill, and looks forward to it being passed into law.”

Click here to read the full bill text.

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