[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1437 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 1437
To amend title XI of the Social Security Act to require that direct-to-
consumer advertisements for prescription drugs and biological products
include truthful and non-misleading pricing information.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 13, 2019
Mr. Durbin (for himself, Mr. Grassley, Mr. King, and Mr. Alexander)
introduced the following bill; which was read twice and referred to the
Committee on Finance
_______________________________________________________________________
A BILL
To amend title XI of the Social Security Act to require that direct-to-
consumer advertisements for prescription drugs and biological products
include truthful and non-misleading pricing information.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Drug-price Transparency in
Communications (DTC) Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Direct-to-consumer advertising of prescription
pharmaceuticals is legally permitted in only 2 developed
countries, the United States and New Zealand.
(2) In 2018, pharmaceutical ad spending exceeded
$6,046,000,000, a 4.8-percent increase over 2017, resulting in
the average American seeing 9 drug advertisements per day.
(3) In 2015, pharmaceutical companies spent more than
$100,000,000 on advertising with respect to each of the 16 most
advertised brand-name drugs and biological products, primarily
new and relatively high-cost medications.
(4) The 10 most commonly advertised drugs have list prices
ranging from $535 to $11,000 per 30-day supply or usual course
of therapy.
(5) According to a 2011 Congressional Budget Office report,
direct-to-consumer advertising is used to promote only a small
set of specific drugs, typically the expensive, brand-name
medications. And the top-selling drugs in any given year are
frequently among the drugs with the largest expenditures for
direct-to-consumer advertising.
(6) According to a 2011 Congressional Budget Office report,
pharmaceutical manufacturers advertise their products directly
to consumers in an attempt to boost demand for their products
and thereby raise the price that consumers are willing to pay,
increase the quantity of drugs sold, or achieve some
combination of the two.
(7) Studies show that patients are more likely to ask their
doctor for a specific medication and for the doctor to write a
prescription for it, if a patient has seen an advertisement for
such medication, regardless of whether the medication is
clinically appropriate for the patient or whether a lower-cost
generic may be available.
(8) According to a 2011 Congressional Budget Office report,
the average number of prescriptions written for newly approved
brand-name drugs with direct-to-consumer advertising was 9
times greater than the average number of prescriptions written
for newly approved brand-name drugs without direct-to-consumer
advertising.
(9) Approximately half of Americans have high-deductible
health plans, under which they often pay the list price of a
drug until their insurance deductible is met. All of the top
Medicare prescription drug plans use coinsurance rather than
fixed-dollar copayments for medications on nonpreferred drug
tiers.
(10) The Centers for Medicare & Medicaid Services is the
single largest drug payer in the Nation. Drug price inflation
accounts for a significant portion of the 22-percent, 32-
percent, and 42-percent growth in Medicare parts D and B and
Medicaid expenditures, respectively, on a per beneficiary basis
between 2013 and 2016.
(11) The 20 most advertised drugs on television cost
Medicare and Medicaid a combined $24,000,000,000 in 2017.
(12) Price shopping is the mark of rational economic
behavior, and markets operate more efficiently when consumers
have relevant information about a product, including its price,
before making an informed decision about whether to buy that
product.
(13) The American Medical Association has passed
resolutions supporting the requirement for price transparency
in any direct-to-consumer advertising.
(14) The Kaiser Family Foundation found that 88 percent of
the public favors the Federal Government requiring prescription
drug advertisements to include a statement on how much the drug
costs.
(15) Pursuant to its existing authority under sections 1102
and 1871 of the Social Security Act, on May 10, 2019, the
Centers for Medicare & Medicaid Services published regulations
(subpart L of part 403 of title 42, Code of Federal
Regulations) to require direct-to-consumer television
advertisements of prescription drugs and biological products
for which payment is available through or under Medicare or
Medicaid to include the wholesale acquisition cost of that drug
or biological product.
(16) To support the permanence and clarity of this policy,
and to facilitate future planning, Congress finds a benefit to
codifying such regulation.
SEC. 3. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE
TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.
Part A of title XI of the Social Security Act is amended by adding
at the end the following new section:
``requirement that direct-to-consumer advertisements for prescription
drugs and biological products include truthful and non-misleading
pricing information
``Sec. 1150C. (a) In General.--The Secretary shall require that
each direct-to-consumer advertisement for a prescription drug or
biological product for which payment is available under title XVIII or
XIX includes an appropriate disclosure of truthful and non-misleading
pricing information with respect to the drug or product.
``(b) Determination by CMS.--The Secretary, acting through the
Administrator of the Centers for Medicare & Medicaid Services, shall
determine the components of the requirement under subsection (a), such
as the forms of advertising, the manner of disclosure, the price point
listing, and the price information for disclosure.''.
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