Will Displaying Drug List Prices In Ads Help Lower Costs?
Alex Azar, secretary of Health and Human Services, announced a new rule requiring drugmakers to publish drug list prices in TV ads.
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The Trump administration moved forward on Wednesday with its plan to lower prescription drug prices by requiring drugmakers to display the list price “in a legible textual statement at the end of the advertisement.”
Secretary of Health and Human Services Alex Azar said today that when it comes to changing prescription drug prices, “putting prices in TV ads may be the most significant single step any administration has ever taken.” But patient advocates are not convinced it will have an immediate impact on drug pricing.
The rule would apply to prescriptions that cost more than $35 per month or courses of treatment, which are covered by Medicare. The rule is very specific, requiring that the price be displayed, “for sufficient duration and in a size and style of font that allows the information to be read easily.”
Industry groups have fought this move since it was announced in October. They adopted voluntary rules, that would have directed ad viewers to a website with more detailed cost information. Today, in a statement, the Pharmaceutical Research and Manufacturers of America (PhRMA) wrote that the list price is confusing since that’s not what most people pay.
The rule addresses that by requiring an additional statement that reads, “If you have health insurance that covers drugs, your cost may be different.”
PhRMA also said that the rule raises “First Amendment and statutory concerns.”
Court challenges may be coming. The legal authority given by the White House is based on the laws that require Medicare and Medicaid to be run in a cost-effective manner, according to the rule.
Rachel Sachs, an associate professor of law at Washington University in St. Louis and an expert in drug-pricing regulation, told NPR and Kaiser Health News in October that could be a weak legal argument since most drugs are marketed to the broader public, not just Medicare and Medicaid beneficiaries.
Consumer and patient advocates generally hailed the move as a step towards greater price transparency, but questioned whether it would do much to lower high prices.
“We don’t believe that disclosing list prices will shame drug corporations into lowering list prices,” says Ben Wakana, executive director of Patients for Affordable Drug Prices. “Drug companies have been shamed about their price increases for years. They appear to be completely comfortable with the shame as long as it is bringing them in the billions of dollars a year that they make from their outrageous prices.”
He gives the government credit for trying to do something on health prices, noting “taking action on this issue is hard.” But he thinks some of the administration’s other ideas to lower prices — announced in a plan released last May — might have a bigger impact.
Critics have pointed out the government’s plan for enforcing the rule is weak, as NPR reported last fall. The plan for enforcement involves competitors policing each other by bringing legal action against competitors who aren’t compliant, Azar said in Wednesday’s press briefing. He calls it “a quite effective mechanism of enforcement.”
Azar defended the government’s authority to issue the new rule. “This is not without precedent,” he told reporters. “We have for over 50 years required that car manufacturers and car dealers post the sticker price of cars on the windows of their cars and be transparent about — even though there are negotiations and everything else — because it’s a starting point that’s an important part of consumer fairness.”
The car-buying analogy doesn’t work very well for drugs, notes Adrienne Faerber, a lecturer at the Dartmouth Institute for Health Policy and Clinical Practice.
“When you go to the car dealer and you see that sticker price and you can negotiate a better price that can fit your budget directly with the car dealership,” she explains. But, she says, drug prices are negotiated through layers of middlemen: “So you don’t get to negotiate based on these prices like you would with a car.”
In other words, car shoppers have a lot more choices that sick patients do, and a lot more bargaining power.
Faerber says certainly displaying the list price won’t “magically flip a switch and cut a percentage or two off of the total drug costs.” But she says it will be interesting to see how patients react to high list prices on their TV screens.
“Consumers are going to start wondering what are people getting for that money,” she says.
President Trump Defends Himself Against Report He Did Not Pay Taxes For 8 Years
President Donald Trump says he just did what other real estate developers were doing. He took enormous businesses losses for tax purposes. On Twitter, he described it as “sport.”
ARI SHAPIRO, HOST:
President Trump is defending himself against a New York Times report that says he sustained more than a billion dollars in losses in the late ’80s and early ’90s. The Times based its report on summaries of federal taxes Trump paid during that period, but Trump said today that reporting big losses on your taxes is common in the real estate business. NPR’s Jim Zarroli explains.
JIM ZARROLI, BYLINE: The Times report says Trump lost so much money during the decade that he was able to completely avoid paying taxes in eight of the 10 years from 1985 to 1994, but Trump noted in a tweet this morning that big losses on paper, at least, were common in real estate at the time. He said developers got massive write-offs that allowed them to declare a loss in most cases. It was sport, he said. It’s called tax shelter. Tomasz Piskorski, who teaches real estate at Columbia Business School, says that was pretty much true. Real estate developers had lots of legal ways to avoid paying taxes.
TOMASZ PISKORSKI: So it was not uncommon to have a positive profit on your real estate business and at the same time declared to the tax authority that you have a loss. And there’s nothing illegal about that. This is completely allowed by the U.S. tax code.
ZARROLI: And Piskorski says the years between 1985 and 1994 were an especially bad time in real estate. A lot of developers lost money. Trump in particular had taken out a lot of loans that he would later default on. Steve Rosenthal is a senior fellow at the Tax Policy Center.
STEVE ROSENTHAL: And he burned through money quickly. He lost spectacularly. Year after year, he lost spectacularly.
ZARROLI: So it’s reasonable to think that Trump had real, actual losses as well in addition to paper losses, which would cut his tax bill even more. Trump has never made a secret of the fact that he took advantage of tax laws whenever possible. During his campaign, he often argued that because he knew how to use the tax code, he was in a good position to reform it. He knew which loopholes to close.
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PRESIDENT DONALD TRUMP: It’s something I’ve been talking about for a long time despite, frankly, being a big beneficiary of the laws. But I’m working for you now. I’m not working for Trump.
(CHEERING, APPLAUSE)
ZARROLI: But Steve Rosenthal says Trump hasn’t pushed through any reforms. Real estate still gets special treatment in the tax code.
ROSENTHAL: Now that he’s been president, he’s done nothing to close any of the loopholes. His tax bill only opened additional loopholes for real estate developers.
ZARROLI: For instance, Rosenthal says, the 2017 tax law made it harder for most businesses to sell assets without paying capital gains tax, but the real estate industry was exempt from the changes. Developers such as Trump have long benefited from the U.S. tax code, and there’s no sign that’s changing. Jim Zarroli, NPR News, New York.
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NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
The Thistle & Shamrock: Season Of Light
Loreena McKennitt
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Celebrate the coming of summer, the fertility of the season and the greening of the earth as Fiona Ritchie invites you to gather around the fires of “Beltane,” one of four ancient, annual Celtic festivals that mark the passage from one season to the next. Artists featured include Loreena McKennitt, The Poozies, and Jim Malcolm.
Soccer Fans Are In Disbelief After Liverpool Beats Barcelona 4-0
Liverpool upset Barcelona to advance to the Champions League final. NPR’s Noel King talks to Wright Thompson of ESPN The Magazine who says the soccer team “perfectly reflects” the city of Liverpool.
NOEL KING, HOST:
Last night, Liverpool’s soccer team did what it was not supposed to be able to do.
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UNIDENTIFIED ANNOUNCER #1: Go on and take it quickly – Origi.
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UNIDENTIFIED ANNOUNCER #1: Yeah. We got it.
UNIDENTIFIED ANNOUNCER #2: Yeah.
UNIDENTIFIED ANNOUNCER #1: Over (unintelligible). We got it.
UNIDENTIFIED ANNOUNCER #2: Yes, you did.
KING: Liverpool beat Barcelona to advance to the Champions League finals – and not just beat them. Liverpool crushed Barcelona 4-0. Barcelona is widely considered to be the best club in the world. This is a very big deal for the city of Liverpool, and Wright Thompson is here to tell us why. He’s a senior writer for ESPN The Magazine. He’s joining us from his home in Oxford, Miss. Good morning, Wright.
WRIGHT THOMPSON: Good morning.
KING: All right. That tape was delightful. For the uninitiated, what are the Champions League finals? Why was this such a big deal?
THOMPSON: Well, you know, this was to get them into the Champions League finals, which is a league made up of the best teams from the leagues all over the world. And so it’s an honor for teams just to be asked to compete in it. And it really is the best of the best playing each other. And it’s, you know – as you could hear the sound of their voices, it’s a very big deal.
KING: Yeah, it was – that was terrific. It wasn’t just a win, right? It was a comeback against Barcelona.
THOMPSON: Correct. They play home and away. And so they lost 3-0 in Barcelona, which means that they had to win 4-0 at home. So I mean, even if they’d won 3-0 last night, it wouldn’t have been enough. And so it really was a miraculous comeback.
KING: They had to crush them. You were recently in Liverpool. You wrote a long story – a long piece called “Liverpool Rising.” Will you explain why this team is so important to the city? Tell us about Liverpool and what this team means to them.
THOMPSON: You know, Liverpool is a dock city. It is an industrial city that was in decline for a very long time. I mean, I have a book out that’s a – right now called “The Cost Of These Dreams.” It’s a collection of stories very much like this Liverpool story.
And there’s a line in the intro I’ve been thinking about for the last 24 hours. And I wrote an essay as a preface, and it talked about, you know – the line was these tribal ideas of home and family and sporting events played by strangers. And that absolutely is what’s happening because if you start in the ’80s with the decline of the docks and Toxteth riots and the city’s, you know, really left-wing reaction to Margaret Thatcher and on and on and on, so many of these things that Liverpudlians – which is a delightful word to say – feel about themselves are represented in this team that takes the field at their stadium called Anfield. And it is very, very tribal, which is interesting because Liverpool is one of the few places I’ve ever been that manages to be a modern, multicultural, global city, and yet retain enough of its tribal soul to still feel like itself.
KING: So people in this city really hang their hopes on this team.
THOMPSON: They hang many things on them. They hang hopes. They find a great deal of joy that they are poised to finish first or second in the English League, which they haven’t won in 29 years. And that will happen or not happen this Sunday. And I think that if you ask fans around Liverpool – that, yes, they desperately want this long-awaited title. They desperately want to win the Champions League final that’s coming up on June 1.
KING: Well, I’ll be rooting for them. Wright Thompson’s new book is called “The Cost Of These Dreams: Sports Stories And Other Serious Business.”
Thanks so much.
THOMPSON: Thank you.
[POST-BROADCAST CORRECTION: In this story, Wright Thompson incorrectly says the Champions League is made up of the best teams from leagues all over the world. The Champions League is a tournament involving only the top European clubs.]
Copyright © 2019 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
