Trump’s requirement to disclose drug prices will cause confusion not clarity

The news that pharmaceutical companies will be required to include drug prices on TV adverts comes as part of President Trump’s commitment to promote lower drug prices. James Mather, Senior Pharma Analyst at GlobalData, a leading data and analytics company, offers his view:

“At first this appears a logical approach to tackling high drug prices; however, the list price does not translate directly into the ‘true’ price of a drug. Drug makers often bundle their brands together when negotiating, meaning the individual drug list prices can be almost meaningless in these cases.

“Primary research conducted by GlobalData suggests that a pharmaceutical company with a diverse portfolio in a therapy area significantly improves its ability to negotiate with payers. Therefore, the introduction of list prices to TV adverts will instead provide false representation of the co-payment a patient will make, as this is heavily dependent on their insurers negotiations with pharmaceutical companies.

“The intention behind this announcement is clear, by forcing pharmaceutical companies to publish drug prices in consumer TV advertisements, Trump is aiming to increase the awareness of high drugs prices with the public and apply pressure to companies to lower prices. This short-sighted policy completely ignores one of the core underlying causes of high US drug prices, which is the complex structure of the US healthcare system.”

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