I still don't think drug ads will include pricing any time soon

So, I was right!

Or maybe I was wrong.

Or perhaps the jury's still out.

In May, when President Trump released his blueprint for lowering prescription drug pricing, I wrote a blog post saying that I didn't see how FDA had authority under existing regulations to mandate the inclusion of prices in the direct-to-consumer (DTC) ads. I further claimed that getting such a requirement in place would either require a new regulation, or more likely new legal authority.

Well, as some of you might have heard, yesterday, the Trump administration released a new proposed rule that would require pharmaceutical companies to include the Wholesale Acquisition Cost (WAC) in television ads.

I'll have much more to say about this proposed rule as the conversation continues. And I can't decide which verdict to make on my earlier prediction.

I want to make one point here that hasn't been mentioned in any of the coverage I've seen so far.

Too frequently people talk about prescription drug advertising in a vacuum. The assumption seems to be that people know absolutely nothing about anything and on to this tabula rasa the promotions from pharmaceutical companies are forced, brainwashing people into storming their doctors' offices to demand prescription drugs.

That's not true. Not even close.

People care about their health. They care about the health of their children, their parents, their spouses, and others. When they have a health issue, they start looking for information about ways to treat that issue, ideally to cure it, or at least to help mitigate the symptoms and severity of the condition.

Their search for information will (I hope) include an investigation of whether a prescription treatment is the right option, but it will also include the crap that's sold on disreputable websites. Their search will include supplements, with all of the appropriate concerns.

This is relevant to the debate about drug pricing because one reason prescription drugs cost much more than these other options is that they work. We know they work because the FDA has evaluated the science behind them and believes that there's good reason to believe they work.

The other reason they're more expensive is because most people have some form of prescription drug coverage from their insurance, and insurance companies are willing to pay far more to keep their policy holders healthy than most consumers are willing to pay out of pocket.

Throughout the CMS's proposed rule, there are repeated discussions about how information about the WAC will enable consumers to make rational decisions about treatment options. The assumption seems to be that consumers are limited solely to trying to decide between prescription drug A and prescription drug B and that knowing the WAC will somehow enable them to make a better decision between the two. All by itself, this is a deeply suspect proposition.

But the more important point I want to make now is that people aren't trying to decide between prescription drug A and B. They're also considering pseudoscience crap C and possibly dangerous supplement D and over-the-counter treatment E and loads of other options as well.

Currently, people don't know how much prescription drugs cost, and maybe that's a good thing because it keeps people from comparing that $84,000 prescription drug to the $75 pseudoscience product. Acting as if the price is the sole, or even the primary, factor that consumers should use to evaluate treatment options ignores that most of the evaluation doesn't occur purely among different prescription treatments, and it also rarely involves a qualified health care professional.

It's most often a person, maybe a family, alone, or talking with their friends trying to figure out what's wrong and how they can fix it.

The response to including pricing in prescription drug ads could be, as I've said repeatedly, that people are scared away from prescription drugs that would be relatively affordable for the individual.

It also could be that the crap starts getting more expensive. After all, if people grow accustomed to seeing health treatments advertised with a list price of $100,000 or more, then they won't necessarily notice that the item being advertised is a dangerous supplement or pure pseudoscience.

I've noticed over the past few years that more and more ads for supplements have started mimicking prescription drug advertising. They make their logos look like prescription drug logos. They include a risk statement in their ads. To someone who isn't trained in knowing the difference, you could be forgiven for thinking there's no difference between these products and prescription treatments.

Is it really a stretch to think that requiring prescription treatments to include prices will result in those pseudoscience products doing the same, or to worry that the prices they start seeing as their comparator is the now revealed price of the prescription treatment?

On Bending the Cost Curve & MACRA's Flaws

I'm taking advantage of my law school education to write about issues that are related to my work, but sometimes a bit afield of the strictly limited area of FDA regulation of advertising and promotion. Whenever I have something that I think might interest the readers of this blog, I'll post the piece to my Scribd.com account, a link to which is always available in the right rail under the label of "Long-form writings."

The first such piece is about the Medicare Access and CHIP Reauthorization Act (MACRA) and why MACRA, which was colloquially known as the "permanent doc fix," is going to be a huge issue in the 2020 election. In fact, some time next year, I expect the very serious flaws in this legislation to explode in the public consciousness and to become the next "crisis" in healthcare financing.

If you'd like to get ahead of the topic to prepare yourself, take a look at the linked piece. I'd be happy to continue the discussion of this topic in the comments on this post.

People Care about Their Cost for Medicine, Not Pricing

The Kaiser Family Foundation released a poll showing that most Americans of all political persuasions support requiring prices in prescription drug ads, as supported by President Trump.

Ed Silverman of Stat News wrote a story about this poll, including a few comments from me. Later, I mentioned on Twitter that there was at least one important point I didn't tell Ed.

The poll didn't ask people what price to include (WAC, AMP, NADAC, FUL, AAC, SWP, etc.), and that's not surprising, since most people don't realize that there are so many different prices for prescription drugs.

That's an important point. There are tons of prices for prescription drugs, and at the end of the day, none of them correlates with what consumers actually care about.

Consumers care about how much THEY will pay for their prescriptions, but there's no way to determine that for all consumers, so any price that is presented is AT BEST deeply misleading.

What actually determines the price paid by the consumer at the pharmacy counter is a combination of: 1) what insurance (if any) they have, 2) which pharmacy they're using, 3) where they are in terms of their personal/family deductible for the year (or progress toward the prescription drug donut hole for those with Part D coverage), and 4) whether the manufacturer has any sort of copay or patient assistance program.

The WAC for Drug A might be $100, but if my copay is $4, then that's what matters to me. And if Drug B has a WAC of $50, but my copay is $25 for Drug B, then I'm not going to prefer Drug B despite the lower WAC.

I didn't conduct the Kaiser survey, and it would be difficult to ask the right questions to get at this issue, but if the pollsters were to include questions about things such as which price matters to a consumer, or what consumers mean when they say they want the "price" included in the drug ads, I suspect that what they'll find is that when pollsters ask, "Do you want pricing in drug ads?" what consumers hear is, "Do you want the ad to include how much you'll have to pay out of pocket for the drug?"

And unfortunately (or fortunately), there's no way to do that. I don't mean it's very hard to do that. I mean it's impossible to do that. Because the factors (as discussed above) are deeply personal, there's no way a manufacturer can include that information in their ads.

As Peter Pitts noted in a recent column, one factor driving the recent emphasis on drug pricing is the transition to high-deductible plans. As Americans are being asked to shoulder more of the costs out of pocket, they're becoming more aware of the high cost of some prescription drugs.

A few years ago, I learned just how much variety there is among pharmacies even for generic drugs, when I was buying medicine for a family member who did not have health insurance. I called several different pharmacies because the price was solely coming out of my pocket, and I was shocked to learn that the price varied from more than $150 to $10 for a 30-day supply. Needless to say, I chose the pharmacy with the $10 prescription.

All of this is to say that in addition to the issues I've previously discussed on how unlikely it is for FDA to mandate the inclusion of drug pricing in ads, consumers really don't understand what is being proposed, and as a consequence, they're unlikely to be happy with anything that results.

As I said to Ed during our phone call discussing this in comments that wound up on the cutting room floor, this is a situation where consumers are angry at pharmaceutical companies and I suspect that a significant part of the bipartisan support for including pricing in ads is along the lines of, "if pharma companies are against it, then it must be a good idea."

Careers in Food & Drug Law

I started law school last year, enrolling in Drexel University's Thomas Kline School of Law's accelerated JD program. In the fall, I'll begin my final year.

Among other things, becoming a law student made me learn about the Food and Drug Law Institute's group for those new to food and drug law (NFDL). Although I've been involved with FDLI for more than a decade, I wasn't aware of this program, which has a variety of programs and opportunities for young lawyers and law students who are new to the food and drug bar.

In March, I organized an FDLI event at the Kline Trial Advocacy Institute in Philadelphia. This was the first NFDL event outside the DC area, and approximately 40 law students from area schools attended.

The current issue of FDLI's Update magazine has my write-up about the evening's event, including some of the insights from Gayle Lawson of the FDA, Paul Savidge of Spark Therapeutics, Yvonne McKenzie previously of Pepper Hamilton, Amy Rick of FDLI, and Marlene Shea of Johnson & Johnson.

If you know any law students considering a career in food and drug law, I hope you'll share the piece and let them know about the NFDL.

Drug Ads Won't Include Drug Pricing Anytime Soon


Earlier today, the President announced a series of measures intended to lower drug pricing. Most of the measures were expected, but one particular item caught my eye.

"FDA is going to get straight to work on having drug companies share their prices in direct-to-consumer ads," said Secretary Azar, according to this transcript of his prepared remarks. That piqued my interest because ad-promo is sort of important to me. I just spent two days training people on all of the FDA's ad-promo requirements. Do I have to revise all of my materials and send out corrections to the attendees?

This announcement was part of the American Patients First blueprint, so I went to take a look at the blueprint itself. And there it is on page 11.

Listed under the heading "Immediate Actions," "FDA evaluation of requiring manufacturers to include list prices in advertising."

And then again on page 25, "HHS may" (emphasis added)
"Call on the FDA to evaluate the inclusion of list prices in direct-to-consumer advertising."

That's a far cry from FDA beginning to require companies include drug pricing in their advertising.

I'm well acquainted with 21 CFR 202.1, and I can't figure out under what provision FDA could reasonably interpret companies to have an obligation to include list prices.

Even determining what that requirement is would take some time, since there's the list price for a single dose, the price for a standard course of treatment, the annual price for people who take the treatment, etc.

So, it will indeed take some "evaluation" from FDA to determine how to require such inclusion in advertising. That might be why the FDA commissioner's statement about today's plan neglected to mention this item.

And of course, there's a separate question of whether there's a legal basis for such a requirement.

Congress certainly could pass a law to require the inclusion of this information in advertising. Fairly recently, Congress required that print advertising include the "MedWatch" statement.

Such a new requirement would probably face court challenges, as many "compelled speech" provisions have been facing court challenges.

And as part of its deliberations, Congress would, I hope clarify things such as exactly what ads this requirement applied to.

Assuming Congress figured this out, the President signed the bill, FDA promulgated the relevant regulations, and everything successfully survived court challenges, there could at some point in President Trump's third term be a new requirement for prescription ads to include pricing information.

Why, though, would anyone want this? What exactly is the mechanism by which such a requirement would lower drug pricing?

I can think of two possibilities. First, shame. Perhaps, the idea is that pharmaceutical companies would be simply too embarrassed to include the price of very expensive drugs in their ads. Based on this idea, just exposing the prices to the light of day would itself result in the prices being lowered.

I find this idea implausible. Companies already make their prices public in various ways. It isn't unusual for companies to announce pricing in investor notices or announcements of drug approvals. That publicity hasn't resulted in any lowering of costs, and I see no reason why this would change things.

The second possibility is that consumers would demand lower-cost alternatives. I guess the idea is that a consumer who sees an ad for a potential cancer treatment with a list price of $100,000 would think, "Gee, I better look for a less expensive alternative treatment."

I don't know why a consumer would think that, and I also don't know why anyone would find it desirable to have consumers do so.

Would a consumer who definitely won't be paying the full list price really respond to seeing the list price by looking for a less expensive treatment? I doubt it.

But more importantly, I don't want consumers deciding against a course of treatment based on the list price. In FDA's 2017 guidance about presenting health care economic information to payors, FDA stated that sponsors should present this information to people with the skill to understand such information and quoted the House report that the legal provision permitting such communications were "not intended to permit manufacturers to provide such health care economic information to medical practitioners."

If FDA and Congress were concerned that physicians would not understand healthcare economic information, why would anyone think that mandating the presentation of incomplete HCEI to consumers is a good idea? Because remember that list price of treatment is only one factor in determining actual cost effectiveness of treatment.

TL/DR version: This is a bad idea that would at a minimum require new regulations to become an actual requirement. It probably requires a new law to authorize it. I fully expect that this proposal will generate a ton of headlines and chatter for the next few days, and then be quietly ignored by people who actually care about controlling the cost of medications.

Update (May 27, 2018): A group of Senators sent a letter to several major pharmaceutical companies urging them to voluntarily include drug prices in their ads. It's unclear to me whether this letter makes it more or less likely that the Senate will take up and pass legislation to add this requirement to prescription medicine ads.

FDA Product Name Guidance Finalized

Last week, the FDA published a final version of the Product Name Placement, Size, and Prominence in Promotional Labeling and Advertisements.

FDA has been remarkably active on this topic, as this is now the third update to the guidance in the past five years. People who have been following this guidance will be pleased to hear that there's little new. Though there are many changes, there are no substantial changes from the 2013 version. The most significant development in the new guidance is the provision of examples demonstrating FDA's principles about prominence of the product name.

If you'd like a quick overview of the guidance, I suggest this one from Intouch Solutions.


Disclosure: I sit on the Google Health Advisory Board, and Google has been a client of PhillyCooke Consulting. Nothing in this post has been shown to Google or received the endorsement or approval of anyone at Google. I have discussed the topic of this post with Google employees.

"Why this ad?" (WTA) functionality has suddenly become hot news in the pharmaceutical industry. For those of you who have not noticed it previously, or heard the hubbub, here's the deal.

Google takes transparency quite seriously, and given the privacy concerns everyone has about trusting any company with as much information as Google maintains on people, it's understandable why.

As part of its transparency efforts, Google added some new functionality to its search engine marketing (SEM) results a few years ago. Users are able to learn why a particular ad is being presented to them.

In practice what users see is a symbol (either an encircled letter "i" or a green triangle) next to a promoted message.

The red box surrounds the symbol in mobile and desktop search results that
enable the user to learn more about the ad targeting.
Users who click on the symbol see a question appear, "Why this ad?"

These images show the "Why this ad?" popup that users see after clicking on the symbol.

Clicking on the question prompts a further box to appear with information about why that particular ad was displayed to the user.

There are differences between the functionality in a desktop/laptop and a mobile environment. For example, in the mobile environment, the shadow box effect obscures and separates the underlying ad from the information supplied by Google more than the overlaid box alone that is seen on a laptop.

Both mobile and desktop ads display the root URL of the destination from the ad at the top of the box, and both allow signed-in users to opt out of seeing ads from that URL via a slider at the bottom of the box, which again displays that root URL of the destination webpage.

The reasons provided for what the ad is based on will vary depending on what caused the ad to appear. The factors listed in SEM ads will always include the search terms and might also include factors such as location (if the user permits Google to access that information) or that the user has previously visited the site.

The WTA information and functionality is not advertising content. No advertiser is permitted to alter this content or has any control over it. Advertisers indirectly influence it via the parameters that they set for determining when their ads appear. For example, if an advertiser targets only users who have previously visited their website, then that factor might appear, whereas if the targeting is solely based on the search terms, then it would be less likely to appear.

Some people have recently learned about this functionality and raised questions about whether it poses a potential risk for violating the Food and Drug Administration's (FDA) advertising regulations.

The scenario these people envision is that a company is using a redirecting ad, which by definition doesn't include the brand name in the ad itself but instead redirects users to a Brand.com website. If a user sees such an ad and clicks on the WTA symbol, and then clicks a second time on the "Why this ad?" popup, the user will see the brand name appearing because the brand name is most often the root URL of the home page for the destination of the redirecting ad.

The FDA has made clear via previous enforcement actions (such as many of the infamous 14 search letters from 2009) that merely using the brand name in a URL is considered by the FDA to be a mention of the drug for the purposes of advertising the product, and carries with it all of the requirements associated with any other product name mention.

Depending on the type of ad, the requirements might include only the inclusion of the brand and generic names and the relative sizing of the two, or they could be as extensive as the inclusion of the complete indication statement, dosage form, etc., associated with a full product promotion.

Let's first address the idea that a company could be out of compliance because the brand name of its product appeared without the generic name. The brand name is appearing in a location over which the company has no control. As mentioned earlier, the popup box is not itself an advertising unit. Companies cannot ask Google to change the information that appears in the box, and they have no control over it. There is some indirect influence, but this is definitely not a company-owned or company-controlled communication. Consequently, it would seem that this appearance of the brand name would be analogous to a newspaper using the brand name, and newspapers frequently use the brand name of drugs without including the generic name. 

FDA would never take enforcement action against a company for that type of third-party action, and it is hard to imagine that they would do so here.

Then there's a second issue. Depending on whether a user is accessing the ad via a mobile device or a desktop computer, the user might be able to see the underlying ad at the same time as the overlay. It is certainly possible that this could mean that a user sees both the brand name and some of the underlying redirecting ad, which was so carefully designed by the company to avoid including the brand name. In some cases, there is information in the redirecting ad that would be considered by the FDA to describe the product's use. And in that same set of infamous letters from 2009, FDA made very clear that including some description of a product's use with the brand name carries with it the full requirements associated with a complete production promotion (indication statement, etc.).

Does that pose a risk of FDA enforcement? 

For FDA to take an enforcement action in this instance, FDA would have to hold a company accountable for a message over which it has complete control (the underlying redirecting ad) when that message is combined with a separate message over which the company has no control.

It seems hard to believe the FDA would do something like that.

I admit that I would be happier if the WTA overlay box behaved the same way on a desktop as it does on a mobile device, with the shadow box effect that obscures the underlying ad and that also makes the separation between the two communications more clear.

But even without this change being implemented, I see an extremely low risk that FDA would take an enforcement action for an advertising publisher creating a tool that reveals more information than an advertiser wanted included in their ad.

While Google is determining what (if any) changes to make to its WTA functionality in light of the latest stir, I would submit for all of the reasons above that this poses a low risk of enforcement.