Secretary Azar's Drug Price Proposal is a Tough Pill to Swallow

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By Jon Decker

Health and Human Services (HHS) Secretary Alex Azar recently unveiled a new proposal requiring that a drug's 'sticker price' be listed in television commercials. While promoting greater transparency in the prescription market is a noble goal, Secretary Azar's proposal unfortunately misses the mark on how to best disclose drug prices to consumers. Even more worrisome, Azar's proposal carries the risk of patients unnecessarily forgoing vital medications due to confusion resulting from his hasty rulemaking.

The 'sticker price' that Secretary Azar wants to force all drug manufacturers to display in advertisements is often not indicative of how much a medication actually costs. This is because the pharmaceutical industry is able to take advantage of rebates to lower the costs of medication, and consumers may be able to lower the price even further through discount programs and/or by using their health insurance policy.

Since the 'sticker price' is not reflective of what patients actually pay, why confuse consumers by showing them misleading price info? Doing so would be similar to watching a commercial for a $60,000 Ford, only to discover at the dealership that the car actually costs $30,000.

Now here is where the stakes get higher. Imagine if someone saw that ad for a $60,000 Ford and thought "it's way too expensive". Most likely, they would never go to the dealership to see what price they could get for the car in the first place. Applying this to drug costs, Secretary Azar's proposal could dissuade patients from asking about a certain type of medication because they believe the out-of-pocket costs will be too high. This could prevent patients from accessing medicine they need.

Consumers would appreciate greater transparency on the cost of medications; However, Secretary Azar's proposal would not provide the most accurate information for patients to make an informed decision. A better proposal would give patients the full context when disclosing the costs of a drug – including the potential for savings. If Secretary Azar follows this path instead, his plan will be just what the doctor ordered.