II 

116TH CONGRESS 

1ST SESSION S. 1437 

To amend title XI of the Social Security Act to require that direct-toconsumer advertisements for prescription drugs and biological products 

include truthful and non-misleading pricing information. 

IN THE SENATE OF THE UNITED STATES 

MAY 13, 2019 

Mr. DURBIN (for himself, Mr. GRASSLEY, Mr. KING, and Mr. ALEXANDER) 

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 truthful and nonmisleading 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 in Communications (DTC) Act’’. 

6 SEC. 2. FINDINGS. 

7 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) In 2015, pharmaceutical companies spent 

10 more than $100,000,000 on advertising with respect 

11 to each of the 16 most advertised brand-name drugs 

12 and biological products, primarily new and relatively 

13 high-cost medications. 

14 (4) The 10 most commonly advertised drugs 

15 have list prices ranging from $535 to $11,000 per 

16 30-day supply or usual course of therapy. 

17 (5) According to a 2011 Congressional Budget 

18 Office report, direct-to-consumer advertising is used 

19 to promote only a small set of specific drugs, typi20 cally the expensive, brand-name medications. And 

21 the top-selling drugs in any given year are fre22 quently among the drugs with the largest expendi23 tures for direct-to-consumer advertising. 

24 (6) According to a 2011 Congressional Budget 

25 Office report, pharmaceutical manufacturers adverVerDate Sep 11 2014 05:39 May 22, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1437.IS S1437

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1 tise their products directly to consumers in an at2 tempt to boost demand for their products and there3 by raise the price that consumers are willing to pay, 

4 increase the quantity of drugs sold, or achieve some 

5 combination of the two. 

6 (7) Studies show that patients are more likely 

7 to ask their doctor for a specific medication and for 

8 the doctor to write a prescription for it, if a patient 

9 has seen an advertisement for such medication, re10 gardless of whether the medication is clinically ap11 propriate for the patient or whether a lower-cost ge12 neric may be available. 

13 (8) According to a 2011 Congressional Budget 

14 Office report, the average number of prescriptions 

15 written for newly approved brand-name drugs with 

16 direct-to-consumer advertising was 9 times greater 

17 than the average number of prescriptions written for 

18 newly approved brand-name drugs without direct-to19 consumer advertising. 

20 (9) Approximately half of Americans have high21 deductible health plans, under which they often pay 

22 the list price of a drug until their insurance deduct23 ible is met. All of the top Medicare prescription drug 

24 plans use coinsurance rather than fixed-dollar copay25 ments for medications on nonpreferred drug tiers. 


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1 (10) The Centers for Medicare & Medicaid 

2 Services is the single largest drug payer in the Na3 tion. Drug price inflation accounts for a significant 

4 portion of the 22-percent, 32-percent, and 42-per5 cent growth in Medicare parts D and B and Med6 icaid expenditures, respectively, on a per beneficiary 

7 basis between 2013 and 2016. 

8 (11) The 20 most advertised drugs on television 

9 cost Medicare and Medicaid a combined 

10 $24,000,000,000 in 2017. 

11 (12) Price shopping is the mark of rational eco12 nomic behavior, and markets operate more efficiently 

13 when consumers have relevant information about a 

14 product, including its price, before making an in15 formed decision about whether to buy that product. 

16 (13) The American Medical Association has 

17 passed resolutions supporting the requirement for 

18 price transparency in any direct-to-consumer adver19 tising. 

20 (14) The Kaiser Family Foundation found that 

21 88 percent of the public favors the Federal Govern22 ment requiring prescription drug advertisements to 

23 include a statement on how much the drug costs. 

24 (15) Pursuant to its existing authority under 

25 sections 1102 and 1871 of the Social Security Act, 


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1 on May 10, 2019, the Centers for Medicare & Med2 icaid Services published regulations (subpart L of 

3 part 403 of title 42, Code of Federal Regulations) 

4 to require direct-to-consumer television advertise5 ments of prescription drugs and biological products 

6 for which payment is available through or under 

7 Medicare or Medicaid to include the wholesale acqui8 sition cost of that drug or biological product. 

9 (16) To support the permanence and clarity of 

10 this policy, and to facilitate future planning, Con11 gress finds a benefit to codifying such regulation. 

12 SEC. 3. REQUIREMENT THAT DIRECT-TO-CONSUMER AD13 VERTISEMENTS FOR PRESCRIPTION DRUGS 

14 AND BIOLOGICAL PRODUCTS INCLUDE 

15 TRUTHFUL AND NON-MISLEADING PRICING 

16 INFORMATION. 

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

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

19 ‘‘REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISE20 MENTS FOR PRESCRIPTION DRUGS AND BIOLOGICAL

21 PRODUCTS INCLUDE TRUTHFUL AND NON-MIS22 LEADING PRICING INFORMATION

23 ‘‘SEC. 1150C. (a) IN GENERAL.—The Secretary shall 

24 require that each direct-to-consumer advertisement for a 

25 prescription drug or biological product for which payment 

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1 priate disclosure of truthful and non-misleading pricing in2 formation with respect to the drug or product. 

3 ‘‘(b) DETERMINATION BY CMS.—The Secretary, act4 ing through the Administrator of the Centers for Medicare 

5 & Medicaid Services, shall determine the components of 

6 the requirement under subsection (a), such as the forms 

7 of advertising, the manner of disclosure, the price point 

8 listing, and the price information for disclosure.’’. 

Æ 


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