- Monday, Jun. 3, 2019
The United States Department of Health and Human Services finalized a new rule that requires most television commercial advertising for prescription drugs to disclose their list prices. The rule will go into effect in July.
HHS believes that by disclosing the prices of drugs in direct-to -consumer television advertising, it will help control the rising cost of drugs. HHS said, "This final rule is designed to address rising list prices by introducing price transparency that will help improve the efficiency of Medicare and Medicaid programs by reducing wasteful and abusive increases in drug and biological product list prices -- spiraling drug costs that are then passed on to federal healthcare program beneficiaries and American taxpayers more broadly."
Specifically, the rule requires that, when advertising prescription drugs that are covered by Medicare or Medicaid on television (which includes broadcast, cable, streaming, and satellite), the commercial must disclose on-screen the drug's list price for a thirty day supply or typical course of treatment. The rule does not require the disclosure of prices, however, when the price is less than $35.
The rule requires that the following disclosure be used: "The list price for a [30-day supply of ] [typical course of treatment with] [name of prescription drug or biological product] is [insert list price]. If you have health insurance that covers drugs, your cost may be different." The disclosure is required to be at the end of the commercial in a "legible manner," which means that "it is placed appropriately and is presented against a contrasting background for sufficient duration and in a size and style of font that allows the information to be read easily."
The Association of National Advertisers came out against the rule, arguing that it is highly likely that the rule is unconstitutional.
Now is the time for advertisers and their agencies to consider what changes will be required to current creative, as well as commercials that are in development, to ensure that they be in compliance by the time the rule takes effect in July.
Jeffrey A. Greenbaum, Managing Partner of Frankfurt Kurnit since 2010, is one of the country’s leading advertising lawyers. He is a partner in the Frankfurt Kurnit Klein + Selz's Advertising, Marketing & Public Relations Group and has extensive experience representing advertisers, advertising agencies, and media companies on advertising, branded entertainment, and intellectual property matters. He is also the Chairman of the Global Advertising Lawyers Alliance.
This column presents a general discussion of legal issues, but is not legal advice and may not be applicable in all situations. Consult your attorney. To contact Jeffrey A. Greenbaum ESQ click here.