The Trump administration announced final rules last week requiring pharmaceutical drug companies to disclose list prices of prescription drugs in television ads.
“What I say to the companies is if you think the cost of your drug will scare people from buying your drugs, then lower your prices,” Health and Human Services Secretary Alex Azar said. “Transparency for American patients is here.”
When the rules go into effect, TV drug ads must disclose list prices for any medication covered by Medicare and Medicaid and costing more than $35 for a month’s supply, Azar said.
The 10 most commonly advertised drugs have prices ranging from $488 to $16,938 per month for a usual course of therapy, according to the latest government figures referenced by The Associated Press.
That might cause a little sticker shock, except — as the drug companies have pointed out — consumers don’t really pay that much. Insurance companies and the federal government foot a lot of the bill in a system that leaves the consumer and even the doctor unaware of the bottom line.
A few years ago, Oklahoma City hospital executive Stanley Hupfeld used this apt analogy in his book “Political Malpractice”: In modern medical finance, we hand our credit card to our teenage daughter and send her to the mall with instructions to get whatever she wants and, when she get there, she gives the card to the sales clerk and says to give her whatever she needs — and neither one of them ever looks at the final total.
It’s not surprising that Daddy’s credit card bill is a little high.
For patients, the equivalent of our father’s credit card bill — higher insurance premiums that typically run through employers or a rapidly depleting Medicare trust fund — is so removed from the process of purchasing medication that it is meaningless.
Forcing Big Pharma to tell us the actual cost of its products is not the ultimate solution to the unacceptably high cost of American health care, but it’s a step in the right direction. The next step would be allowing Medicare (which accounts for 29% of national retail pharmaceutical spending) to negotiate the prices paid for those drugs.
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