[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2304 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 2304
To amend title XI of the Social Security Act to require that direct-to-
consumer advertisements for prescription drugs and biological products
include an appropriate disclosure of pricing information.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 24, 2021
Mr. Durbin (for himself, Mr. Grassley, and Mr. King) 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 an appropriate disclosure of 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 for
Competition Act of 2021'' or the ``DTC Act of 2021''.
SEC. 2. FINDINGS; SENSE OF THE SENATE.
(a) 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) The most commonly advertised medication in the United
States has a list price of more than $6,000 for a one-month's
supply.
(4) A 2021 Government Accountability Office report found
that two-thirds of all direct-to-consumer drug advertising
between 2016 and 2018 was concentrated among 39 brand-name
drugs or biological products, about half of which were recently
approved by the Food and Drug Administration.
(5) 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.
(6) Studies, including a 2012 systematic review published
in the Annual Review of Public Health, a 2005 randomized trial
published in the Journal of the American Medical Association,
and a 2004 survey published in Health Affairs, 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,
even if such medication is not the most clinically appropriate
for the patient or if a lower-cost generic medication may be
available.
(7) 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.
(8) The Centers for Medicare & Medicaid Services is the
single largest drug payer in the United States. Between 2016
and 2018, 58 percent of the $560,000,000,000 in Medicare drug
spending was for advertised drugs, and in 2018 alone, the 20
most advertised drugs on television cost Medicare and Medicaid
a combined $34,000,000,000.
(9) A 2021 Government Accountability Office report found
that direct-to-consumer advertising may have contributed to
increases in Medicare beneficiary use and spending among
certain drugs.
(10) The American Medical Association has passed
resolutions supporting the requirement for price transparency
in any direct-to-consumer advertising, stating that such
advertisements on their own ``inflate demand for new and more
expensive drugs, even when these drugs may not be
appropriate''.
(11) A 2019 study published in the Journal of the American
Medical Association found that health care consumers
dramatically underestimate their out-of-pocket costs for
certain expensive medications, but once they learn the
wholesale acquisition cost (in this section referred to as the
``WAC'') of the product, they are far better able to
approximate their out-of-pocket costs.
(12) 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, exposing beneficiaries to WAC prices.
(13) Section 119 of division CC of the Consolidated
Appropriations Act, 2021 (Public Law 116-260) requires the
Secretary of Health and Human Services to increase the use of
real-time benefit tools to lower beneficiary costs. However,
there still remains a lack of available pricing tools so
patients may not learn of their medication's cost until after
being given a prescription for the medication. A 2013 study
published in The Oncologist found that one-quarter of all
cancer patients chose not to fill a prescription due to cost.
(14) The Federal Government already exercises its authority
to oversee certain aspects of direct-to-consumer drug
advertising, including required disclosures of information
related to side effects, contraindications, and effectiveness.
(b) Sense of Congress.--It is the sense of Congress that--
(1) a lack of transparency in pricing for pharmaceuticals
has led to a lack of competition for such pharmaceuticals, as
evidenced by a finding by the Department of Health and Human
Services that ``Consumers of pharmaceuticals are currently
missing information that consumers of other products can more
readily access, namely the list price of the product, which
acts as a point of comparison when judging the reasonableness
of prices offered for potential substitute products'' (84 Fed.
Reg. 20735);
(2) in an age where price information is ubiquitous, the
prices of pharmaceuticals remain shrouded in secrecy and
limited to those who subscribe to expensive drug price
reporting services, which typically include pharmaceutical
manufacturers or other health care industry entities and not
the general public;
(3) greater insight and transparency into drug prices will
help consumers know if they can afford to complete a course of
therapy before deciding to initiate that course of therapy;
(4) 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;
(5) providing consumers with basic price information may
result in the selection of lesser cost alternatives, all else
being equal relative to the patient's care, and is integral to
providing adequate competition in the market;
(6) the WAC is a factual, objective, and uncontroversial
definition for the list price of a medication, in that it is
defined in statute, reflects an understood place in the supply
chain, and is at the sole discretion of the manufacturer to
set;
(7) there is a governmental interest in ensuring that
consumers who seek to purchase pharmaceuticals for purposes of
promoting their health and safety understand the objective list
price of any pharmaceutical that they are encouraged through
advertisements to purchase, which allows consumers to make
informed purchasing decisions; and
(8) there is a governmental interest in mitigating wasteful
expenditures and promoting the efficient administration of the
Medicare program by slowing the growth of Federal spending on
prescription drugs.
SEC. 3. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE AN
APPROPRIATE DISCLOSURE OF PRICING INFORMATION.
Part A of title XI of the Social Security Act is amended by adding
at the end the following new section:
``SEC. 1150D. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE AN
APPROPRIATE DISCLOSURE OF PRICING INFORMATION.
``(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 pricing information with respect to the drug
or product.
``(b) Appropriate Disclosure of Pricing Information.--For the
purposes of subsection (a), an appropriate disclosure of pricing
information, with respect to a prescription drug or biological
product--
``(1) shall include a disclosure of the wholesale
acquisition cost (as defined in section 1847A(c)(6)(B)) for a
30-day supply of (or, if applicable, a typical course of
treatment for) such drug or product;
``(2) shall be presented clearly and conspicuously, as
appropriate for the medium of the advertisement; and
``(3) may include additional qualitative or quantitative
information regarding the price of such drug or product
explaining that certain patients may pay a different amount
depending on their insurance coverage.
``(c) Enforcement.--Any person who violates the requirement of this
section may be subject to a civil money penalty of not more than
$100,000 for each such violation or to another enforcement mechanism
determined by the Secretary. Any civil money penalty shall be imposed
and collected in the same manner as civil money penalties under
subsection (a) of section 1128A are imposed and collected under that
section.
``(d) Regulations.--The Secretary, acting through the Administrator
of the Centers for Medicare & Medicaid Services, shall promulgate
regulations to carry out this section. Such regulations shall determine
the components of the requirement under this section, including the
forms of advertising, the manner of disclosure, the appropriate
sanctions, and the appropriate disclosure of pricing information.''.
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