Trump’s Big, Uncertain Step to Lower Drug Prices, Explained
Health Care

Trump’s Big, Uncertain Step to Lower Drug Prices, Explained


The Trump administration on Wednesday finalized a rule requiring pharmaceutical companies to disclose drug prices in their television ads if the cost is greater than $35 a month. The requirement is set to take effect as early as this summer.

This is “the most visible action the administration has taken so far to address the rising cost of prescription drugs,” The New York Times’s Glenn Thrush and Katie Thomas note.

The big question: Will it work?

Supporters of the move say it will increase transparency for patients and foster competition that will drive prices lower.

“Requiring the inclusion of drugs’ list prices in TV ads is the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the healthcare they receive,” said HHS Secretary Alex Azar. “Patients who are struggling with high drug costs are in that position because of the high list prices that drug companies set.”

Critics of the proposed rule, including the pharmaceutical industry, contend that list prices are not a good indicator of what patients actually pay at the pharmacy counter since they don’t factor in the discounts and rebates that insurers and pharmacy benefit managers negotiate. They also argue that the mention of high list prices could create sticker shock that keeps patients from getting the medications they need.

Azar pushed back against some of those concerns. "If a drug company is afraid that their prices are so excessive and abhorrent that they will scare patients away from using their drugs, well they ought to look inside themselves and think about whether they should be lowering their prices," he said.

Many experts also say that it will take far more to get drugmakers to lower their prices.

“Telling people what the price is doesn’t change the price,” Stacie B. Dusetzina, associate professor of health policy at the Vanderbilt University Medical Center, told NBC News. “Instead we would need reform to price setting or related to how patient payments are set.”

The administration argued that list prices genuinely do matter to many patients, who either pay them or prices based on them. Still, the final rule will allow insurers to note that patients with insurance may pay different prices, a provisions pharmaceuticals companies wanted — and one that researchers found could undercut what the administration is trying to achieve.