J&J to disclose list prices in TV drug ads
- Johnson & Johnson will include list prices in television commercials for its drugs, the big pharma announced Thursday.
- Scott White, head of J&J's North American Pharmaceuticals business, said the practice will begin by the end of March with the blockbuster blood thinner Xarelto. Commercials will include the medicine's list price as well as potential out-of-pocket costs for patients. Xarelto costs $450 to $540 per month for uninsured patients, according to the Associated Press.
- J&J's move represents a concession from an industry bellwether as the pharma sector grapples with a President and a Congress seeking to make drug pricing more transparent. Similar, albeit smaller, steps have gained much attention too. Last month, Eli Lilly released a commercial for Trulicity that pointed viewers to a website where they could learn more about its list price and out-of-pocket costs — a strategy endorsed by the trade group PhRMA.
The Trump administration's ambitions around regulating drug pricing came into focus last year, beginning with a policy blueprint unveiled in May 2018 that was soon followed with specific, though preliminary, proposals.
In mid-October, the Department of Health and Human Services unveiled a plan that, if finalized, would require drug companies disclose list prices in direct-to-consumer (DTC) television advertisements.
J&J's White said the proposal did affect J&J's decision to include list and out-of-pocket costs in TV commercials.
"We spoke with many consumers and patients to understand what pricing information would be most relevant to them," he said. "Their input not only shaped how we responded to the administration’s DTC TV advertising proposal, it also suggested a common-sense path forward that we believe will give patients clearer, and more valuable, information about the cost of the medicines we advertise on TV."
Though his administration has yet to translate plans into policy, Trump has at times been able to bend the industry away from its traditional behavior.
Last summer, for instance, Pfizer made an unusual retreat on drug pricing, reversing dozens of mid-year price hikes after the president publicly rebuked the company. A handful of other big pharmas subsequently chose to pause planned price hikes as well.
J&J's move could have a similar ripple effect, putting pressure on other drugmakers to follow suit and include pricing information directly in their DTC campaigns.
The announcement comes just a day after J&J said it will send the head of its pharmaceuticals division to an upcoming hearing with the Senate Finance Committee about prescription drug pricing. It also comes less than a month after the big pharma raised the prices on nearly two dozen of its medicines.
J&J said its new approach "builds on" the company's support for revised PhRMA advertising principles released in October, following HHS' proposal to mandate list prices in DTC TV ads. The trade group, however, has criticized such an approach.
"List prices are not a good indicator of what a patient will pay at the pharmacy counter and do not reflect the substantial discounts and rebates negotiated by insurers and pharmacy benefit managers," PhRMA wrote in an October statement following HHS' proposal to require list prices in TV commercials. "In addition, any such requirement would raise significant legal issues, including First Amendment concerns."
Instead, the group favored an approach in which pharma companies would include reference to where patients could find out more information on a medicine's costs, including list prices.
PhRMA's new principles, which all of the group's members committed to, were set to take effect on April 15. J&J's new Xarelto (rivaroxaban) commercials, with all the added pricing information, should roll out before then.
Notably, Xarelto is J&J's most frequently prescribed medicine and accounted for more than $100 million in 2018 ad spending, according to TV analytics firm iSpot.tv.
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