Intended for healthcare professionals

News

Johnson and Johnson will be first US pharma company to reveal a drug’s price in TV advertisement

BMJ 2019; 364 doi: https://doi.org/10.1136/bmj.l751 (Published 15 February 2019) Cite this as: BMJ 2019;364:l751
  1. Owen Dyer
  1. Montreal, Canada

Johnson and Johnson will give pricing information for its most prescribed drug, the anticoagulant rivaroxaban (Xarelto) in direct-to-consumer US television ads starting in March, the company has announced.

Ads will display both the list price and “potential patient out-of-pocket costs,” the company said. Other drugs will be phased in later.

The plan is similar to a Trump administration proposal to demand that drug makers declare their list prices in ads, and is being widely seen as an attempt to forestall compulsory government measures.

It puts Johnson and Johnson a step ahead of the industry’s trade association, PhRMA, which has argued that displaying list prices in ads could discourage patients from seeking appropriate care, since those prices are often much higher than the out-of-pocket costs paid by the majority of patients who have insurance.

Johnson and Johnson’s ads will display both the list price—around $500 (£390; €444) a month in Xarelto’s case—and a price that reflects what a typical patient might pay out of pocket, a formula the company says it arrived at after consultation with patient groups.

Even insured patients might find themselves paying more, however, if their policy includes a high deductible or co-pay. A patient buying drugs over the internet usually pays close to the list price.

PhRMA reacted to the government’s proposal last year by creating voluntary guidelines that instead suggest displaying a web address and phone number in TV ads, which could guide viewers to more detailed and nuanced pricing information. This measure has since been adopted by Eli Lilly.

But this approach was rejected by health secretary Alex Azar—who was, until recently, an Eli Lilly executive. Few TV watchers would follow the link, he said.

Azar commended Johnson and Johnson “for recognising the value of informing consumers about list prices and for doing so voluntarily,” adding: “We call on other manufacturers to follow their lead.”

The industry made a number of small voluntary changes related to pricing in 2018, when the Trump administration began to threaten regulation. By allowing Trump to declare a “win” and move on to other things, industry leaders believe, they bought themselves a reprieve.

The pharmaceutical industry is attracting attention from both main political parties. Trump again mentioned the proposal to demand list prices in ads in his recent State of the Union address. And Democrats, having just taken control of the House of Representatives, are eager to wield their new legislative power against the drug companies.

A string of recent focus groups held by the Republican party revealed the depth of public “hatred” for America’s pharmaceutical industry. Both parties will be seeking to tap that source of voter energy as the 2020 election nears, and pharma leaders are expecting a rocky 21 months.

But the two proposals that most alarm the industry do not concern advertising. One is a Trump administration plan to tie US drug prices to the prices their manufacturers charge abroad.1

The other is a new bill put forward by congressional Democrats that would increase the government’s negotiating power in drug purchasing, and allow it to strip patent exclusivity from firms that fail to act on prices.

References