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August 2, 2019 0
The Trump administration wants to allow Canadian drugs to be imported to give consumers lower prices. This is also supported by almost every Congressional Democrat and many Republicans. It sounds great to allow American consumers to buy cheaper drugs from Canada and is already happening somewhat through online Canadian pharmacies. Consumers can generally save 30-50% and in some cases by a lot more.
So why is this tactic going to fail? First, drug makers do not want to sell to Canadian distributors just to have those lower priced drugs come back to the United States. They happily will sell what Canadian consumers need but will not allow much more than that to be sold into Canada. Drug companies know some Americans buy Canadian drugs but that is a relatively small amount. Once that reimportation gets to be a big business drug companies will restrict what Canadians can buy.
Bob Ehrlich
“The American people will demand a price solution…”
-Bob Ehrlich
Second, the Canadian government has already said they have experienced drug shortages and will not allow Canada to become an exporter of drugs if their own citizens face problems filling prescriptions. Drug makers will not allow their golden goose US market to be destroyed by a Canadian end run. Drug makers always have the option of not selling a drug in Canada if the approved price is too low. That could deprive Canadians of getting access which is not a good scenario.
Unfortunately for drug makers it looks like there will be some system of price indexing or outright price controls in the future. There is no strong support from either party for drug makers charging US consumers more than other developed countries. While Republicans are more friendly to drug makers, they cannot convince their constituents that it is fair to pay significantly more than the French, Canadians or Germans. While they know innovation is funded by US profits, that is a hard sell for voters having trouble affording rising health care costs.
What is the solution? Drug companies must self regulate their desire to raise prices beyond inflation. Any increase beyond that is difficult to defend. American consumers need to get a tangible benefit paying a premium price. That could be faster access to new drugs, and more price support during the introductory period to prove the value of the premium drug. While the industry’s ad campaign explaining the wonders of drug research is good, I am afraid it is insufficient to assuage concerns that Americans pay too much.
The best solution is to have one developed market price for a drug with Canadians and Europeans paying more and Americans paying less. Why would other governments agree to that? There would have to be some benefit in allowing drug companies higher prices in price-controlled markets. That could be through trade concessions in other categories. Any fair price system would take a massive negotiating effort between the drug industry and multi government regulators. Perhaps over time an index system could work as long as the drug industry could make substantially the same returns.
Another solution is to extend patent expirations in exchange for lower prices. Also, any system that speeds approval can be leveraged against high drug prices. What needs to be done is a pragmatic approach that balances need for innovation with lower prices. Saying that drug companies are greedy will not get to a workable long-term drug strategy. American consumers will not benefit if mandating lower prices leads to a cut in vital research.
What I do predict is the drug price issue cannot be successfully fought much longer by lobbyists. That can no longer be the main strategy of drug makers. The American people will demand a price solution as this ire is being stoked in every political debate. Unfortunately, the proposed solutions will not be favorable to drug maker profits. One of the ways to mitigate profit impact is to increase demand. DTC could be a beneficiary of that demand-based strategy. If drug prices are forced down, I would expect drug companies to increase marketing budgets to grow their user base and retain those users.
After so many years of drug prices debates, 2020 looks like the time action will be a reality. Of course, the extent of price action depends on who gets elected. The Sanders/Harris/Warren plan is highly punitive for drug makers while Biden and other moderates will go softer. Trump is not far from moderate Dems on his plans so drug makers will get hurt whoever wins in 2020.

Bob Ehrlich

February 22, 2019 0

I have been in the DTC business a long time. After seeing the excellent Ray Liotta ad I might have predicted the next version would use Joe Pesci or Robert De Niro. Chantix instead cast a wild turkey as its star. Who says DTC can’t be creative?

Bob Ehrlich
“Chantix breaks out with the creative…”
-Bob Ehrlich

In what will be a very memorable spot Chantix takes the “cold turkey” expression literally by casting a turkey to represent a person who quits smoking with Chantix. The story line is that Chantix allows you to gradually quit smoking by decreasing the urge and thus you don’t need to go cold turkey but go slow turkey as the spot is named. In a world where much of the DTC Ads have become boilerplate style, Chantix breaks out with the creative device here. Sometimes using a character to represent a brand is risky. It works well when we get an Aflac Duck. The question a brand and agency must wrestle with is will using a character diminish the serious nature of an Rx drug.

For DTC we have had a number of such character representations. Digger for Lamisil, the walking bladder for Myrbetriq, a dancing stomach for Prevacid are some DTC examples. The risk is that patients who suffer from disease may not like seeing their problem in character terms. Some diseases are clearly inappropriate for creating such treatments. I doubt cancer ads would contain a singing Lung.

For Chantix I love the use of the turkey. After seeing so many testimonial ads in DTC, it was certainly attention getting to see a turkey sitting by the pool dumping its ashtray. The ad was so different from Ray Liotta that I had to go back and make sure I was seeing correctly. Yes, that was Chantix.

Sometimes an attention getting character might have stopping power but dwarf the message. In this case the Chantix story still came through well and the creative just replaced a human with the turkey in situations like lounging by the pool or mowing the lawn. I give Pfizer a lot of credit for approving a story board so different from the traditional user testimonial. Ray Liotta was very effective but so is the turkey. The agency should be applauded for recommending it as it is not always easy to bring something so different like this to the client.

My concern is that Ray may want to whack the turkey for taking over as spokesperson. A Goodfella hates rivals. I do not know how long this turkey creative can last. After all there is no saying like cold squirrel or cold cow. I am afraid the pool out potential may be limited but that depends on the acting range of the turkey. That said if the turkey is meant to get potential Chantix users to get engaged this ad will do that very effectively.

Bob Ehrlich

January 18, 2019 0
Drug companies are under renewed attack. There is yet another new bill in the Senate to end the tax deductibility of DTC ads. The latest is from Elizabeth Warren, who will use drug companies as a campaign talking point about corporate greed. The bill would end all forms of tax benefits for any media type.
We also see the House scheduling hearings on how drug companies price their drugs. We can expect harsh treatment of drug CEOs who will be called to Washington to be attacked by Congress in public televised hearings. Another idea floating in Congress and HHS is to peg US drug prices to Europe. Congress will say that this is a fair way to set US prices as Americans should pay no more than the Germans.
Bob Ehrlich
“DTC could be a sacrificial offering to the critics…”
-Bob Ehrlich
According to a study by Deloitte, all this vitriol is happening as R&D return on investment is down to a paltry 1.9% last year. So critics want drug companies to develop drugs to fight disease with price controls and crappy returns on their R&D investments. Drug companies are in a no-win situation. The critics say drug makers make too much money and are raising prices too fast based on inflation. Yet the data shows they are having trouble recovering R&D investment. Critics want drug companies to improve health outcomes but want to prevent drug companies from free market pricing.
Drug makers are an appealing political target for both parties. Some of the criticism is valid. Drug makers have taken prices up too far too fast. A little prudence is called for if drug makers want to prevent the political hammer from dropping. On the other hand, their dilemma is how to fund that R&D while still providing decent returns to investors. Europe and Canada are getting a free ride off of American consumers. No one expects the average Parisian to volunteer to pay more. Riots in Paris over fuel costs show no chance Europe will help out on drug price support.
So here we are. What is the solution to this mismatch in drug prices? Clearly drug companies are risking draconian measures from Congress. As Dems turn left you can bet they will attack drug companies more vigorously and might even get Republicans and Trump to agree. Nothing will happen quickly but this time may be different. I am afraid it is entirely possible that DTC could be a sacrificial offering to the critics who vastly overestimate the power of DTC ads to create demand. DTC works but is not the driving force in building brands. That advertising, however, is the public face of the drug companies and critics blame DTC for raising demand for premium priced drugs. They think that keeping the information from consumers will keep prices down.
Congress and HHS will try to cajole drug makers to slow down increases. They have already decided to mandate list price be part of consumer ads. Next may be ending the tax deduction for advertising. After that price controls are a real possibility. The Democratic candidates for the 2020 Presidential election will all have a plan to nationalize health care and they will all include price controls in that platform. With Trump as anti-industry as they are we can expect violent agreement that drug makers will be targeted.
So to my colleagues in DTC advertising, buckle up and expect new regulations geared at making DTC harder to execute. I do not expect a ban, but FDA and Congress will be looking for ways to make all our professional lives more difficult.

Bob Ehrlich

October 22, 2018 0
We all know the final price patients pay for prescription drugs is as complex as determining whether life exists on other planets. In no other consumer category do users have no idea what the product will cost. We all can estimate the price of a Mercedes, a four bedroom house in our neighborhood, a new suit, a jug of Tide, or a gallon of gas. We may not be exact but we would get reasonably close. Prescription drugs are unique in that an advertised product can cost $50 a month or $50000.
We would have no idea from watching the DTC ad whether that drug is the $50 or $50000 product. Even our doctor would not know because 72% say in a study by Deloitte they have inadequate price information. Congress wants to remedy that by requiring DTC advertisers to put price information in DTC ads. Consumers widely support this idea and it is from Democrats, Republicans, and Independents, at 83%, 72%, and 73% respectively. HHS Secretary Alex Azar is going ahead with the new policy of requiring price disclosure in drug ads.
Bob Ehrlich
“DTC advertisers will face a new FDA guidance on price disclosure.”
-Bob Ehrlich
Of course, that idea is fraught with problems. It is a well-meaning solution but would cause a raft of other problems. We all know the out of pocket cost of our drugs is dependent on our insurance coverage, our deductible/co-pay, formulary status, treatment protocol, and availability of similar drugs. That means you could pay nothing for a $100000 cancer drug, and more for your $100 a month depression drug. Consumers would benefit from knowing what they would actually pay, but that is not possible to do in a voice over or super on screen.
What insurers and government payers really want to do is discourage DTC advertising of expensive drugs. They think that by forcing price disclosure, the premium price drugs would be advertised less because those drug companies would face consumer backlash once price is part of the advertisement. I have wrestled with the positives of adding price to a DTC ad. I can see some benefit giving a heads up to a potential patient that the premium priced drug may cost a lot and therefore may not be covered or restricted to use after cheaper alternatives have been exhausted.
On the other hand, a patient may misinterpret that price as being unaffordable and not pursue further even though it might not cost them much in the end. I come back to the conclusion that discussing price in the ad would probably confuse consumers more than help them. If I were a policy maker I would focus on the doctor by giving them tools to determine likely out of pocket cost for their patients. They already have the patient insurance information so determining coverage status and final cost should not be too difficult to estimate.
I understand the reason insurers and government payers dislike DTC Ads for expensive drugs. It is a legitimate argument that some of these drugs might be only marginally better than cheaper treatments. DTC Ads create demand and put pressure on payers to cover those drugs. An insurer is placed in a tough position of being the “bad” guy by not covering the latest drug. While that may be a consideration, the restricting of advertising is not the best solution. Insurers need to make their case on comparative efficacy to both doctor and patient. Insurers and patients should not want to pay for drugs with minimal incremental benefit. That case is better made downstream from an awareness DTC ad.
DTC advertisers will face a new FDA guidance on price disclosure in the next few months. It will be just a super or voice over stating the list price for a one month supply. This whole exercise is political and unfortunately will not help consumers. What might help more is the drug industry decision to offer comprehensive price information on their branded web sites announced 10/15 by PhRMA. I doubt any drug maker will drop DTC over this requirement although it may give the highest price drugs some cause for concern.

Bob Ehrlich

September 5, 2018 0

The Senate recently passed an amendment to a larger health care bill that requires drug prices be disclosed in DTC Ads. The Durbin amendment was adopted with bipartisan support. It really just gives HHS a million dollars to study a way to require the disclosure. What is clear is this idea has strong support from President Trump, Congress, HHS Secretary Azar, and the American Medical Association. So, like it or not, the drug advertisers may be forced to add some price information to ads.

Bob Ehrlich
“Drug makers may be forced to add… price information to ads.”
-Bob Ehrlich

On the surface, that list price disclosure seems reasonable. We see MSRP in car ads, so we know whether it is a premium or economy car. Not that we don’t know that already but it is not unreasonable. For cars, we know we will likely pay somewhat less than MSRP but we do know the range a Mercedes will cost us. Congress thinks consumers deserve to know the price of drugs they see advertised. To Congress that seems like it would help consumers decide if this advertised drug should be considered.

Drug pricing is not like car pricing. Consumers pay much less than the list price and sometimes pay nothing for the $50000 drug for cancer. Admittedly, drug pricing is a Byzantine process that confounds most of us. Each insurance company, PBM, and government payer negotiates prices. Each consumer depending on their insurance pays a different price no way near the list price. Sometimes the consumer would pay out of pocket more for their OTC cough medicine than the $50000 cancer drug.

So how should drug companies disclose drug prices? If the list price is not anywhere near what consumers pay, then how does disclosing it help them? It does not. It helps insurance companies in making DTC more difficult for drug companies to execute. The knowledgeable legislators know that if they force drug makers to talk about price that may discourage them from doing DTC Ads for expensive drugs. Drug makers advertising the $100000 cancer drug may decide that DTC is not worth trying to explain the complexities of drug pricing or face the barrage of criticism for having a sticker shock price.

I think this is the real reason for this amendment. Embarrassing drug companies they hope will put a chill on DTC for cancer drugs, biologics for arthritis, Crohn’s, and other new premium drugs. Of course, all drugs will face a guidance on how pricing needs to be discussed. Somehow FDA will make disclosure a time consuming step in a DTC ad. That will add 10-15 seconds to the ad and may make them difficult to execute. Their hope is to get drug companies to stop doing DTC.

So the good news is it will take FDA a while to study and draft guidance for disclosing price. This lag may allow the powerful advertising lobby to show how impractical this disclosure requirement will be. My guess is we may have some compromise that speaks in terms of ranges of price. That is something like “most patients will pay much less than the price listed depending on your insurance coverage.” Or, drug makers may be able to say “the average price paid by consumers is x.”

It may be illegal to require drug makers to disclose price under commercial free speech grounds. I am sure the advertising lobby will argue this inhibits commercial speech. They would have a strong case based on precedent.

My advice to the agencies is to be ready to deal with adding some price statement but I am sure it will be a few years before FDA can figure out how best to do this. They research everything they do and that will take a long time to study. DTC price disclosure sounds great but is just a bad idea that will not help patients.

Bob Ehrlich

June 29, 2018 0

The latest Chantix smoking cessation DTC television ad is featuring my favorite wise guy actor Ray Liotta. Looking a little grayer and heavier Ray is still the iconic member of the De Niro/Pesci crew from Goodfellas, maybe only slightly behind The Godfather in my favorites list. Ray is also in my favorite baseball movie Field of Dreams, portraying the leader of the dead baseball players returning to Kevin Costner’s cornfield.

Ray’s lifelong bugaboo was getting to stop smoking. Pfizer is using him to promote Chantix and rather than just being a paid announcer he is actually a real patient, still paid handsomely I assume. I like him in this role. Usually I wonder how much a celebrity adds to a drug pitch. Do potential users really care that a Hollywood type uses a drug? There have been very effective celebrity campaigns, Sally Field for Boniva, Jennifer Aniston for Dry Eye, Phil Mickelson for Psoriatic Arthritis to name a few.

Bob Ehrlich
“Ray got my attention.”
-Bob Ehrlich

A celebrity campaign needs to get the audience to believe that the celebrity actually uses or really believes in the drug advertised. There are some celebrities who endorse anything and pushing garlic pills, grape juice, reverse mortgages, might hurt your credibility when pushing a cancer treatment. Drug companies need to be very careful that the celebrity chosen has limited exposure as an endorser of health products.

Ray Liotta, to my recollection is not a serial endorser. In fact I do not remember him doing any commercials. That is a good first step. Can I Imagine Ray Liotta having a smoking habit? Sure can. Is Ray credible saying he has had a lifelong problem stopping smoking? Yes. So far so good. What is interesting about the campaign is that Chantix has been on air for years with regular folks pitching their success. Maybe they felt they needed to reinvigorate the story and potential customers would stop and re-engage after all the years of real patient testimonials. Ray got my attention, maybe a bit less than Joe Pesci would have, but any Goodfella is better than none.

I do not know if this is a one off use of a celebrity for Chantix or the first in a series. One thing we know is Hollywood is likely full of smokers, and addicts of other less than legal substances. No credibility issue with Ray having a smoking addiction. I am sure Pfizer will be very careful vetting their celebrity candidates. With all the problems of celebrity reveals on past sexual harassment/assault it is important to do your homework. I think they have chosen well here. Congratulations to Pfizer and their agency for a well done celebrity campaign.

Bob Ehrlich

June 1, 2018 0

Allergan’s Botox is going “Brotox” in its latest DTC campaign. That term is not mine as I borrowed it from a Forbes article. Men, yes, we men are a vast untapped market for smoother skin. As I age, my frown lines are forming, and why not try to look better. For me being the frugal sort, I will personally pass and learn to love my new post 60 visage and save my money.

For those men interested in starting on the cosmetic road to rejuvenation Botox has decided to talk to you directly. From the actors in the DTC spot, it looks like the target are 40-50 year olds who are concerned about maintaining their youthful looks. A Matthew McConaughey type in an expensive suit is seen adjusting his tie as the announcer says, “details make the difference”. Another scene shows another professional who seems to be an architect while the voice over says what Botox is indicated to improve. A third actor is shown jogging while the indications are further discussed.

Bob Ehrlich
“Botox is going ‘Brotox’ in its latest DTC campaign.”
-Bob Ehrlich

The tone of the ad is that men who get Botox are not vain, just fine tuning their details which make the man better. The closing tag line is “The details make a difference; the man makes them matter.” I interpret that to mean this will not transform you, but just give you the little edge to boost your confidence. These men are already successful, and Botox will help them continue that on that track.

Why are men a DTC focus? It has everything to do with the huge market that is under developed with men. Botox is trying to get them to see cosmetic treatment as something that is perfectly normal and not just for Hollywood stars. They want to show that refining those little facial details is just another step in grooming and dressing well. In other words, real men can use Botox. The number is not yet big but growing fast. According to Forbes it was 400,000 in 2014 but grew over 300% in the last ten years.

So, Allergan sees the benefit in investing in a DTC campaign to make Botox more acceptable to men. That is not easy because the historical and cultural male image is to be accepting of those signs of age. The weathered face of the macho man is ingrained in our heritage. John Wayne and Charles Bronson would not use Botox. Mick Jagger and Keith Richards also a no. Maybe Matthew McConaughey and George Clooney would. So this effort is to get the 40 year old male to see cosmetic dermatology in a new light. The wear their baseball cap backwards generation will likely view these Botox tune-ups differently from my generation. Hey, why not if that is how you want to spend your discretionary dollars.

I still drive a Honda, buy most of my clothes on Amazon, and never will pay for first class air. Sorry Allergan but no Botox for me. Fortunately for them I am a dying breed of male. Goodbye Charlie Bronson and that weathered face. Smoother is in.

Bob Ehrlich

May 18, 2018 0

I was watching HHS Secretary Alex Azar during the White House press briefing unveil an idea we have heard pushed before. That is, DTC advertising should disclose the price of the advertised drug. That sounds fair but is a lot more difficult to implement than any other advertised category.

Most advertised retail prices have relevance to consumers. A car advertised at MSRP will sell for somewhere between 85-100% of that price. That is true for most products that disclose prices. Health care prices are wildly variable depending on the payer. Those prices can vary by as much as 50-75%. I understand the goal of HHS. It is to give consumers an idea about how expensive a drug is before they and their physician make the decisions to use it.

Bob Ehrlich
“I doubt a DTC ad is the right place to discuss price.”
-Bob Ehrlich

In my last column on this topic, which was written last July after the American Medical Association recommended that a drug’s price be required in DTC ads, I said prescription drugs are unique in that consumers have no idea what the advertised drug costs based on the ad itself. No other category has ads where its products range from $300 a year to $100,000. Consumers who are interested in an advertised drug may be in for sticker shock and depending on coverage may be paying a high out of pocket cost. Secretary Azar thinks that the consumer deserves to know that price information in advance. The issue is how to do that in the prescription market with its myriad of discounts. What consumers want to know is what they will pay, not what their insurer will pay. Given the numerous payers, all with different formulary coverage and individual discounts, that is hard to communicate.

Clearly drugs can be broadly categorized by cost, so perhaps an ad can say in what pricing category the drug fits. Maybe there are terms HHS can come up with to give consumers an idea in which cost category the drug belongs. Even if they do, consumers care what they pay not the listed retail price. It is possible a $100,000 drug costs them less than the $3000 drug based on reimbursement.

This price disclosure motive seems to be designed to put pressure on drug makers to be embarrassed advertising high priced drugs. That may mean those $100,000 cancer drugs prefer not to advertise if they had to list a high retail price in the ad. My recommendation would be to have ads refer to a link on their website or an HHS website that can discuss price in detail. In a 60 second spot HHS can only expect a super that discloses a list price or a voice over saying what the drug may cost. That would be totally insufficient for consumers and more likely confuse them.

OPDP likely will propose research studies on how best to convey price and we can expect a guidance several years out. I do not agree with the practical value of some of their research studies but this one deserves careful study. I doubt a DTC ad is the right place to discuss price but if it is mandated by FDA then it must be done to help consumers evaluate a drug on the cost/benefit context, and not just to generate public outrage that some drugs are very expensive.


March 23, 2018 0

Kantar Media reported full year 2017 DTC spending declined 4.6%. Is this decline any reason for concern among the DTC industry? No, not really. DTC spending has become an integral part of drug brand marketing. There is no drug industry talk of ending it or reducing its importance. There was such talk during the temporary decline of spending about five years ago but that never took hold.

Bob Ehrlich
“Growth in any given year will depend on new brand entries…”
-Bob Ehrlich

There were several CEOs then who were questioning whether DTC was hurting the drug industry in terms of image. There was joy among the critics that maybe drug companies would end the practice of creating consumer demand. I think the drug companies recognized that the critics would not change their negative views even if DTC was ended. The critics did not like drug companies before the 1997 spending surge and although DTC angered them more, that is not their biggest issue. It has been and is about price. Unless drug makers agree with critics they make obscene profits and cut their prices to generic levels; there will be no peace with the critics. If there were no DTC, price issues would remain. DTC is a convenient talking point and used by critics to lead the public to believe they are being manipulated by greedy drug makers.

So back to the decline of 4.6%. Kantar reported that magazines and Internet companies shouldered the whole decline. In fact television DTC was up over 6% in 2017. The print media industry has a selling job ahead to keep their publications profitable. This is not just about their share of drug ads but a fight for viability of traditional hard copy magazines. Print is still a place to see greater detail on drug benefits and risks and I expect the major print conglomerates to innovate to keep readers and advertisers.

DTC is now a mature ad category. Growth in any given year will depend on new brand entries and when brands are going off patent. We can therefore expect years with growth and years with decline. The 4.6% decline is not the start of any long term trend down. As long as drug companies see a positive ROI DTC ads will continue. We saw the rise of diabetes drug ads the past few years along with the end of erectile dysfunction ads as they go off patent. That is what we will continue to see in DTC spending with some categories accelerating and some ending their ads.

Of course there are existential threats to DTC which could make spending decline dramatically. Those include an outright ban, putting a moratorium on for new brands, taxing it by making it non-deductible, or going to single payer healthcare. None of these will happen in the next few years. That being said, a Democrat House and Senate majority could make it very possible that DTC will be a casualty of healthcare reform. Mr. Trump might sign a bill accepting limitations on DTC as part of a bigger bargain on free market practices.

In the meantime, we will see DTC remain strong in total and see spending shifts within media categories.

Certainly media innovators are looking at new digital platforms such as virtual medicine, point of care opportunities, and new ways to gain efficiency from television and print.

Bob Ehrlich

March 9, 2018 0

Alex Azar the new HHS Secretary has promised to make healthcare value a top goal. Azar says he will shake up the healthcare system to deliver value to patients. He delivered that message this week to hospital executives at a convention in Washington. Azar said that America is not getting enough for the money spent on health services.

In his speech he outlined ways he plans to encourage better bang for the buck. Azar wants patients to have control of their online health records so they are easier to access across providers. He also wants much greater price transparency so patients know how much they are spending. This is because patient deductibles and co-pays have risen so much that patients, not insurers, are the payers for much of their care. Azar said the fee for service model must change to encourage delivery of outcomes rather than just encourage more tests and procedures.

Bob Ehrlich
“It is likely we will see government…intercede on drug pricing.”
-Bob Ehrlich

Citing the Trump philosophy that shaking things up is necessary, Azar promised that innovation will be encouraged through the Medicare system. He vowed to remove regulation that impedes innovative approaches. Although he was talking to hospital executives, Azar said drug companies and doctors also must also deliver value.

Drug companies will be under intense pressure to justify the value of newer and often much more expensive treatments. From Azar’s speech and Trump’s past criticism of drug prices, it is likely we will see government be more willing to intercede on drug pricing. Whether that is through Medicare price negotiation, reimportation, or pressure on patents, it is clear drug companies will feel pressure.

What does all this mean for DTC? It makes it more likely drug companies will advertise branded drugs. They want to raise awareness among the public and doctors of new treatments. By doing so that keeps pressure on payers to cover the newer drugs that are generally much more expensive than older alternatives. While advertising drugs that cost $100k a year might annoy insurance companies it does force them to decide faster on formulary status. They have to respond to their consumer and physician base about why a life saving drug is not covered. Insurers are justified in demanding outcome research but it is hard to refuse covering a drug that extends the lives of patients, particularly if it is advertised widely.

What is clear is American consumers cannot keep paying higher premiums, deductibles, and co-pays that are well above their wage increases. That is not sustainable and the public will demand action. Azar saying a shake up will occur is not bluster. It has to happen or else the single payer advocates will get what they want, a government run healthcare system.

Bob Ehrlich