II 

117TH CONGRESS 

1ST SESSION S. 2304 

To amend title XI of the Social Security Act to require that direct-toconsumer 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Drug-Price Trans5 parency for Competition Act of 2021’’ or the ‘‘DTC Act 

6 of 2021’’. 

7 SEC. 2. FINDINGS; SENSE OF THE SENATE. 

8 (a) FINDINGS.—Congress finds the following: 


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1 (1) Direct-to-consumer advertising of prescrip2 tion pharmaceuticals is legally permitted in only 2 

3 developed countries, the United States and New 

4 Zealand. 

5 (2) In 2018, pharmaceutical ad spending ex6 ceeded $6,046,000,000, a 4.8 percent increase over 

7 2017, resulting in the average American seeing 9 

8 drug advertisements per day. 

9 (3) The most commonly advertised medication 

10 in the United States has a list price of more than 

11 $6,000 for a one-month’s supply. 

12 (4) A 2021 Government Accountability Office 

13 report found that two-thirds of all direct-to-con14 sumer drug advertising between 2016 and 2018 was 

15 concentrated among 39 brand-name drugs or biologi16 cal products, about half of which were recently ap17 proved by the Food and Drug Administration. 

18 (5) According to a 2011 Congressional Budget 

19 Office report, pharmaceutical manufacturers adver20 tise their products directly to consumers in an at21 tempt to boost demand for their products and there22 by raise the price that consumers are willing to pay, 

23 increase the quantity of drugs sold, or achieve some 

24 combination of the two. 


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1 (6) Studies, including a 2012 systematic review 

2 published in the Annual Review of Public Health, a 

3 2005 randomized trial published in the Journal of 

4 the American Medical Association, and a 2004 sur5 vey published in Health Affairs, show that patients 

6 are more likely to ask their doctor for a specific 

7 medication and for the doctor to write a prescription 

8 for it, if a patient has seen an advertisement for 

9 such medication, even if such medication is not the 

10 most clinically appropriate for the patient or if a 

11 lower-cost generic medication may be available. 

12 (7) According to a 2011 Congressional Budget 

13 Office report, the average number of prescriptions 

14 written for newly approved brand-name drugs with 

15 direct-to-consumer advertising was 9 times greater 

16 than the average number of prescriptions written for 

17 newly approved brand-name drugs without direct-to18 consumer advertising. 

19 (8) The Centers for Medicare & Medicaid Serv20 ices is the single largest drug payer in the United 

21 States. Between 2016 and 2018, 58 percent of the 

22 $560,000,000,000 in Medicare drug spending was 

23 for advertised drugs, and in 2018 alone, the 20 most 

24 advertised drugs on television cost Medicare and 

25 Medicaid a combined $34,000,000,000. 


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1 (9) A 2021 Government Accountability Office 

2 report found that direct-to-consumer advertising 

3 may have contributed to increases in Medicare bene4 ficiary use and spending among certain drugs. 

5 (10) The American Medical Association has 

6 passed resolutions supporting the requirement for 

7 price transparency in any direct-to-consumer adver8 tising, stating that such advertisements on their own 

9 ‘‘inflate demand for new and more expensive drugs, 

10 even when these drugs may not be appropriate’’. 

11 (11) A 2019 study published in the Journal of 

12 the American Medical Association found that health 

13 care consumers dramatically underestimate their 

14 out-of-pocket costs for certain expensive medications, 

15 but once they learn the wholesale acquisition cost (in 

16 this section referred to as the ‘‘WAC’’) of the prod17 uct, they are far better able to approximate their 

18 out-of-pocket costs. 

19 (12) Approximately half of Americans have 

20 high-deductible health plans, under which they often 

21 pay the list price of a drug until their insurance de22 ductible is met. All of the top Medicare prescription 

23 drug plans use coinsurance rather than fixed-dollar 

24 copayments for medications on nonpreferred drug 

25 tiers, exposing beneficiaries to WAC prices. 


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1 (13) Section 119 of division CC of the Consoli2 dated Appropriations Act, 2021 (Public Law 116– 

3 260) requires the Secretary of Health and Human 

4 Services to increase the use of real-time benefit tools 

5 to lower beneficiary costs. However, there still re6 mains a lack of available pricing tools so patients 

7 may not learn of their medication’s cost until after 

8 being given a prescription for the medication. A 

9 2013 study published in The Oncologist found that 

10 one-quarter of all cancer patients chose not to fill a 

11 prescription due to cost. 

12 (14) The Federal Government already exercises 

13 its authority to oversee certain aspects of direct-to14 consumer drug advertising, including required disclo15 sures of information related to side effects, contra16 indications, and effectiveness. 

17 (b) SENSE OF CONGRESS.—It is the sense of Con18 gress that— 

19 (1) a lack of transparency in pricing for phar20 maceuticals has led to a lack of competition for such 

21 pharmaceuticals, as evidenced by a finding by the 

22 Department of Health and Human Services that 

23 ‘‘Consumers of pharmaceuticals are currently miss24 ing information that consumers of other products 

25 can more readily access, namely the list price of the 


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1 product, which acts as a point of comparison when 

2 judging the reasonableness of prices offered for po3 tential substitute products’’ (84 Fed. Reg. 20735); 

4 (2) in an age where price information is ubiq5 uitous, the prices of pharmaceuticals remain shroud6 ed in secrecy and limited to those who subscribe to 

7 expensive drug price reporting services, which typi8 cally include pharmaceutical manufacturers or other 

9 health care industry entities and not the general 

10 public; 

11 (3) greater insight and transparency into drug 

12 prices will help consumers know if they can afford 

13 to complete a course of therapy before deciding to 

14 initiate that course of therapy; 

15 (4) price shopping is the mark of rational eco16 nomic behavior, and markets operate more efficiently 

17 when consumers have relevant information about a 

18 product, including its price, before making an in19 formed decision about whether to buy that product; 

20 (5) providing consumers with basic price infor21 mation may result in the selection of lesser cost al22 ternatives, all else being equal relative to the pa23 tient’s care, and is integral to providing adequate 

24 competition in the market; 


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1 (6) the WAC is a factual, objective, and 

2 uncontroversial definition for the list price of a 

3 medication, in that it is defined in statute, reflects 

4 an understood place in the supply chain, and is at 

5 the sole discretion of the manufacturer to set; 

6 (7) there is a governmental interest in ensuring 

7 that consumers who seek to purchase pharma8 ceuticals for purposes of promoting their health and 

9 safety understand the objective list price of any 

10 pharmaceutical that they are encouraged through 

11 advertisements to purchase, which allows consumers 

12 to make informed purchasing decisions; and 

13 (8) there is a governmental interest in miti14 gating wasteful expenditures and promoting the effi15 cient administration of the Medicare program by 

16 slowing the growth of Federal spending on prescrip17 tion drugs. 

18 SEC. 3. REQUIREMENT THAT DIRECT-TO-CONSUMER AD19 VERTISEMENTS FOR PRESCRIPTION DRUGS 

20 AND BIOLOGICAL PRODUCTS INCLUDE AN 

21 APPROPRIATE DISCLOSURE OF PRICING IN22 FORMATION. 

23 Part A of title XI of the Social Security Act is 

24 amended by adding at the end the following new section: 


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1 ‘‘SEC. 1150D. REQUIREMENT THAT DIRECT-TO-CONSUMER 

2 ADVERTISEMENTS FOR PRESCRIPTION 

3 DRUGS AND BIOLOGICAL PRODUCTS IN4 CLUDE AN APPROPRIATE DISCLOSURE OF 

5 PRICING INFORMATION. 

6 ‘‘(a) IN GENERAL.—The Secretary shall require that 

7 each direct-to-consumer advertisement for a prescription 

8 drug or biological product for which payment is available 

9 under title XVIII or XIX includes an appropriate disclo10 sure of pricing information with respect to the drug or 

11 product. 

12 ‘‘(b) APPROPRIATE DISCLOSURE OF PRICING INFOR13 MATION.—For the purposes of subsection (a), an appro14 priate disclosure of pricing information, with respect to 

15 a prescription drug or biological product— 

16 ‘‘(1) shall include a disclosure of the wholesale 

17 acquisition cost (as defined in section 

18 1847A(c)(6)(B)) for a 30-day supply of (or, if appli19 cable, a typical course of treatment for) such drug 

20 or product; 

21 ‘‘(2) shall be presented clearly and conspicu22 ously, as appropriate for the medium of the adver23 tisement; and 

24 ‘‘(3) may include additional qualitative or quan25 titative information regarding the price of such drug 

26 or product explaining that certain patients may pay 


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1 a different amount depending on their insurance 

2 coverage. 

3 ‘‘(c) ENFORCEMENT.—Any person who violates the 

4 requirement of this section may be subject to a civil money 

5 penalty of not more than $100,000 for each such violation 

6 or to another enforcement mechanism determined by the 

7 Secretary. Any civil money penalty shall be imposed and 

8 collected in the same manner as civil money penalties 

9 under subsection (a) of section 1128A are imposed and 

10 collected under that section. 

11 ‘‘(d) REGULATIONS.—The Secretary, acting through 

12 the Administrator of the Centers for Medicare & Medicaid 

13 Services, shall promulgate regulations to carry out this 

14 section. Such regulations shall determine the components 

15 of the requirement under this section, including the forms 

16 of advertising, the manner of disclosure, the appropriate 

17 sanctions, and the appropriate disclosure of pricing infor18 mation.’’. 

Æ 


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