Title: Drug-price Transparency in Communications (DTC) Act
Policy area: Health

Summary:
Drug-price Transparency in Communications (DTC) Act
This bill provides statutory authority for the Centers for Medicare & Medicaid Services rule titled Medicare and Medicaid Programs; Regulation to Require Drug Pricing Transparency, published on May 10, 2019. The rule requires direct-to-consumer television advertisements for covered drugs and biologics under Medicare and Medicaid to include the list price of a 30-day supply or for a typical course of treatment, if the list price is at least $35 per month. The rule takes effect July 9, 2019.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1437 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 1437

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 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 non-misleading pricing information.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Drug-price Transparency in 
Communications (DTC) Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Direct-to-consumer advertising of prescription 
        pharmaceuticals is legally permitted in only 2 developed 
        countries, the United States and New Zealand.
            (2) In 2018, pharmaceutical ad spending exceeded 
        $6,046,000,000, a 4.8-percent increase over 2017, resulting in 
        the average American seeing 9 drug advertisements per day.
            (3) In 2015, pharmaceutical companies spent more than 
        $100,000,000 on advertising with respect to each of the 16 most 
        advertised brand-name drugs and biological products, primarily 
        new and relatively high-cost medications.
            (4) The 10 most commonly advertised drugs have list prices 
        ranging from $535 to $11,000 per 30-day supply or usual course 
        of therapy.
            (5) According to a 2011 Congressional Budget Office report, 
        direct-to-consumer advertising is used to promote only a small 
        set of specific drugs, typically the expensive, brand-name 
        medications. And the top-selling drugs in any given year are 
        frequently among the drugs with the largest expenditures for 
        direct-to-consumer advertising.
            (6) According to a 2011 Congressional Budget Office report, 
        pharmaceutical manufacturers advertise their products directly 
        to consumers in an attempt to boost demand for their products 
        and thereby raise the price that consumers are willing to pay, 
        increase the quantity of drugs sold, or achieve some 
        combination of the two.
            (7) Studies show that patients are more likely to ask their 
        doctor for a specific medication and for the doctor to write a 
        prescription for it, if a patient has seen an advertisement for 
        such medication, regardless of whether the medication is 
        clinically appropriate for the patient or whether a lower-cost 
        generic may be available.
            (8) According to a 2011 Congressional Budget Office report, 
        the average number of prescriptions written for newly approved 
        brand-name drugs with direct-to-consumer advertising was 9 
        times greater than the average number of prescriptions written 
        for newly approved brand-name drugs without direct-to-consumer 
        advertising.
            (9) Approximately half of Americans have high-deductible 
        health plans, under which they often pay the list price of a 
        drug until their insurance deductible is met. All of the top 
        Medicare prescription drug plans use coinsurance rather than 
        fixed-dollar copayments for medications on nonpreferred drug 
        tiers.
            (10) The Centers for Medicare & Medicaid Services is the 
        single largest drug payer in the Nation. Drug price inflation 
        accounts for a significant portion of the 22-percent, 32-
        percent, and 42-percent growth in Medicare parts D and B and 
        Medicaid expenditures, respectively, on a per beneficiary basis 
        between 2013 and 2016.
            (11) The 20 most advertised drugs on television cost 
        Medicare and Medicaid a combined $24,000,000,000 in 2017.
            (12) Price shopping is the mark of rational economic 
        behavior, and markets operate more efficiently when consumers 
        have relevant information about a product, including its price, 
        before making an informed decision about whether to buy that 
        product.
            (13) The American Medical Association has passed 
        resolutions supporting the requirement for price transparency 
        in any direct-to-consumer advertising.
            (14) The Kaiser Family Foundation found that 88 percent of 
        the public favors the Federal Government requiring prescription 
        drug advertisements to include a statement on how much the drug 
        costs.
            (15) Pursuant to its existing authority under sections 1102 
        and 1871 of the Social Security Act, on May 10, 2019, the 
        Centers for Medicare & Medicaid Services published regulations 
        (subpart L of part 403 of title 42, Code of Federal 
        Regulations) to require direct-to-consumer television 
        advertisements of prescription drugs and biological products 
        for which payment is available through or under Medicare or 
        Medicaid to include the wholesale acquisition cost of that drug 
        or biological product.
            (16) To support the permanence and clarity of this policy, 
        and to facilitate future planning, Congress finds a benefit to 
        codifying such regulation.

SEC. 3. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR 
              PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE 
              TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.

    Part A of title XI of the Social Security Act is amended by adding 
at the end the following new section:

 ``requirement that direct-to-consumer advertisements for prescription 
   drugs and biological products include truthful and non-misleading 
                          pricing information

    ``Sec. 1150C.  (a) In General.--The Secretary shall require that 
each direct-to-consumer advertisement for a prescription drug or 
biological product for which payment is available under title XVIII or 
XIX includes an appropriate disclosure of truthful and non-misleading 
pricing information with respect to the drug or product.
    ``(b) Determination by CMS.--The Secretary, acting through the 
Administrator of the Centers for Medicare & Medicaid Services, shall 
determine the components of the requirement under subsection (a), such 
as the forms of advertising, the manner of disclosure, the price point 
listing, and the price information for disclosure.''.
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