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July 7, 2017 0

Some state delegations are pushing the AMA to adopt a position to push drug makers to include the retail price in their ads. They feel full disclosure will inform consumers that some drugs are very expensive up front. The physicians pushing this idea feel drug makers will be held more accountable by the public if they disclosed prices in their ads.

Clearly these advocates hope that forcing drug makers to disclose price in ads will create pressure on drug makers to keep prices in check. The question I have is, is disclosing price a net positive or negative at the stage of awareness advertising? Consumers are entitled to know prices of what they are being prescribed. Does upfront price disclosure help them make a better decision or just add confusion?

Bob Ehrlich
“Advertising price…will not be a net positive for consumers.”
-Bob Ehrlich

In a world where the advertised price is what you pay, then disclosing it makes sense. In the drug world, however, consumers do not pay retail prices. There are many net prices to consumer depending on insurance, co-pays, formulary position, and discounts offered by drug makers. The retail price is only relevant if the consumer pays it. I understand that many expensive drugs are not a viable option unless the consumer has good reimbursement. That viability is rarely known by the consumer until they take that prescription in to be filled.

Advertising price generally will not be a net positive for consumers. An expensive drug that says it costs $100k a year may scare consumers away from asking about it even though it may in fact cost them nothing. A $20 a month drug may sound cheap but a consumer may be paying full price for it because of coverage. The only intent of this potential AMA policy is to embarrass drug makers of very high price drugs. Pressuring drug makers on price is fair game for insurance companies, PBMs, and government payers. Retail price disclosure will only cause angst and confusion among consumers.

I also have concerns that consumers are not experts on price/value of drugs. Does curing Hep C for $80,000 cost less than liver transplant, or long hospitalization? Does paying $100,000 for an extra year of life make sense for a cancer patient? These decisions are complex and required an informed factual basis. It makes sense to have independent medical third parties do research on drug price/value and have consumers and doctors made aware of those analyses. I can even support ads being required to have a web site posted that has those analyses.

I understand doctors are frustrated with drug prices. I also know some drug companies have gone too far in aggressive pricing. The solution is in self-restraint, tough negotiations by payers, and well done research on cost/benefit of drugs. Advertising retail price will not help consumers and in fact may discourage them from seeking treatment because they assume they cannot afford the drug.

Bob Ehrlich


June 24, 2016 0

The AHSP, the organization that represents 43,000 pharmacists and technicians in hospitals and other acute care settings, called for banning DTC. This was a change from previous positions that supported DTC in limited use. The AHSP does not represent retail pharmacy but it is still an important voice in health care. Along with the AMA this call for a ban adds fuel to the political fire related to drug company bashing over pricing and marketing.

Bob Ehrlich
“The AHSP..cites.. much misstated data on drug marketing..”
-Bob Ehrlich

The AHSP statement calling for a ban cites the much misstated data that says drug companies spend more on marketing than research. They also say that DTC can be misleading. Therefore they feel that pharmacists and other clinicians can best help consumers with drug selection. This reasoning is faulty. Drug company marketing data includes sales force expense, sampling costs, physician ads, as well as DTC. The drug companies spend over $50 billion on R&D. That is ten times the amount spent on DTC.
Are drug ads misleading? FDA requires all claims to be clinically supported and requires fair balance. They review all ads for accuracy. While advertising is designed to sell, drug ads are the most scrutinized of all advertising categories.
Despite the facts, the anti DTC forces are a major concern for drug advertisers. Hilary and Trump are not friends of the drug industry. It is clear from their statements that neither has their facts straight. Hilary sees drug companies as her enemy, an evil profit hungry industry. Trump sees drug companies as one of his vendors to be squeezed like a mattress supplier for his hotels.
What drug company employees and their media and agency partners must do is let Congress know the facts. Take the time to educate your Congressional representatives how important drug advertising is and why it is important to consumers. Have them understand that DTC does not raise prices. Banning commercial speech for lawful products is a bad idea. What category will be next?
The call for a ban by hospital pharmacists is hypocritical given the huge investment hospitals are making in DTC. Almost every hospital advertises these days. These same hospital based pharmacists think it is acceptable to advertise surgery on television but not drugs.
DTC advertising is not perfect but deserves to be one way for patients to get information. If pharmacists think banning information helps patients, they are wrong. Their input is valuable but to say they and the physician should have a monopoly on patient communication is unrealistic in the Internet era.

Bob Ehrlich