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Legislative bills

Durbin and Grassley Push for Transparency in Pharmaceutical Advertisements

Strategic Insights

— 2 min read

Senators Richard J. Durbin and Chuck Grassley have proposed a bill to require pharmaceutical companies to disclose prices in direct-to-consumer advertisements. They argue that this would empower patients and reduce the significant spending on medications by Americans. The bill has previously passed the Senate, but was blocked by a Senate Republican. The Senators point out that the US is one of only two industrialized countries that allow drug advertising, with companies spending over $6 billion annually on such ads. They contend that this practice inflates demand for new and expensive drugs, even when they may not be necessary.

Key Takeaways:

  • The US is one of only two industrialized countries that allow direct-to-consumer (DTC) advertising of pharmaceuticals, with companies spending over $6 billion annually on such ads.
  • DTC advertising accounted for 58% of Medicare's spending on drugs between 2016 and 2018, according to the Government Accountability Office (GAO).
  • Two-thirds of advertised drugs offered "low therapeutic value," according to a 2023 study in the Journal of the American Medical Association.
  • AbbVie spent $315 million on TV ads for Rinvoq, an eczema and arthritis drug, in 2023, with no disclosure of the drug's cost.
  • The American Medical Association has stated that DTC advertising inflates demand for new and expensive drugs, even when these drugs may not be appropriate.
  • President Biden has announced that Medicare will negotiate for discounts on 15 drugs, including Ozempic, Trelegy, Ibrance, and Otezla, which were heavily advertised.
  • Durbin and Grassley's bipartisan bill, the Drug-price Transparency for Consumers (DTC) Act, has previously passed the Senate, but was blocked by a Senate Republican.

Statistics:

  • Over $6 billion is spent annually by pharmaceutical companies on direct-to-consumer advertisements.
  • DTC advertising accounted for 58% of Medicare's spending on drugs between 2016 and 2018.
  • Two-thirds of advertised drugs offered "low therapeutic value," according to a 2023 study.
  • AbbVie spent $315 million on TV ads for Rinvoq in 2023.
  • Medicare spent $22 billion in 2023 on four heavily advertised medications (Ozempic, Trelegy, Ibrance, and Otezla).

Sources:

  • Durbin, R., & Grassley, C. (2023). Durbin, Grassley ask for unanimous consent to pass their bill to crack down on pharmaceutical advertisements. Retrieved from https://www.durbin.senate.gov/newsroom/press-releases/durbin-grassley-ask-for-unanimous-consent-to-pass-their-bill-to-crack-down-on-pharmaceutical-advertisements
  • Government Accountability Office. (2023). Medicare spending on prescription drugs.
  • Journal of the American Medical Association. (2023). Direct-to-consumer advertising of prescription drugs: A review of the evidence.

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