As Drug Makers Roll Out List Prices in Ads, Research Assesses the Impact of Sticker Shock

When the Trump administration announced its intention to require drug makers to list the prices of their products in direct-to-consumer advertising, HHS Secretary Alex Azar said that the move would usher in “a very different world for American drug pricing.” Other stakeholders, however, such as the Biotechnology Innovation Organization (BIO), have voiced concerns that, if patients are exposed to list prices in advertising, they will be reluctant to seek treatment for diseases because of worries about how to pay for high out-of-pocket costs.

Recently, a research letter published in JAMA Internal Medicine describes an attempt to assess consumers’ responses to list price disclosure. The letter’s authors write that they enrolled 580 participants, recruited via an online job board, who represented a wide range of ages, incomes, education levels, insurance coverage, and health statuses. These participants were asked to assume that they each had a recent diagnosis of type 2 diabetes, and they were randomly assigned to view 1 of 5 advertisements for a fictitious diabetes drug.

One ad did not mention price, and the remaining ads disclosed low ($50 per month) or high ($15,500 per month) prices. Two ads included a modifying statement that informed the consumer that, if eligible for patient support, they could pay as little as $0 per month.

The researchers found that, for the cheaper drug, price disclosure had little influence on consumer responses. However, for the high-priced drug, price disclosure significantly reduced the likelihood that participants would ask their provider or insurer about the product, research the drug online, or take the drug. However, when the modifier clause was included in the ad, these reductions were mitigated.

“Although many challenges remain in designing the ultimate US Food and Drug Administration regulation, our results suggest that requiring pharmaceutical companies to disclose the price in [advertising] can be potentially effective in reducing consumer interest in high-priced drugs, but the inclusion of modifiers in these disclosures can reduce or eliminate the influence of disclosure,” conclude the authors.

These findings coincide with an announcement from Johnson & Johnson (J&J) that it plans to begin including list prices—and “potential patient out-of-pocket costs”—in advertising during the first quarter of 2019. J&J will start by disclosing price information for rivaroxaban (Xarelto), the company’s most-prescribed drug. According to a company statement, J&J will take into account consumer feedback as it rolls out list prices and out-of-pocket cost information for other drugs that it advertises directly to consumers.

J&J’s announcement follows shortly after a statement by Eli Lilly, which said in January 2019 that it would provide pricing information online or via a toll-free phone number for its dulaglutide (Trulicity) immediately, and it added that it would roll out similar pricing information for other drugs by the end of February 2019.

Reference

Garrett JB, Tayler WB, Bai G, Socal MP, Trujillo AJ, Anderson GF. Consumer responses to price disclosure in direct-to-consumer pharmaceutical advertising [published online January 22, 2019]. JAMA Intern Med. doi: 10.1001/jamainternmed.2018.5976.