President Trump recently proposed requiring pharmaceutical companies to include a drug’s price in all drug ads. This proposal would do nothing to lower drug prices or benefit Americans in any other way. Simply banning drug ads, as virtually every other country does, would be far more beneficial.
How Trump’s proposal would even work is unclear. There is no set price for a drug. Each prescription drug has a variety of prices, including an average wholesale price and an average sales price. Those prices have at best a modest relationship to a person’s out-o-pocket costs for the drug. The price in part is a function of drugmaker discounts, and markups by the pharmacy benefit manager, the insurer and the pharmacy. Remember, to keep costs down, you should avoid chain pharmacies.
Moreover, prescription drugs come in different dosages. How would the cost of the drug be portrayed in the ad? Which dosage? Based on daily use, weekly use, or monthly use? Americans would be hard-pressed to apply the drug’s advertised cost to their own situation.
And, of course, we all have different insurance policies that cover different amounts for a given drug. How would that be explained or not in the drug ad?
The big problem that needs addressing is the unseemly cost of most drugs, particularly of drugs that are advertised to consumers. The fair and market-based solution to reining in prices is for Americans to pay the average price that people in other wealthy countries pay, called international reference pricing. And, drug ads should be banned, given that consumers have no ability to understand the benefits and risks of drugs based on these ads and must rely on their doctors for guidance as well as to prescribe their drugs.