A bill that would bar pharmaceutical companies from passing on advertising costs for drugs advertised directly to consumers has been introduced in the Senate.
The Pharmaceutical Advertising and Prudent Purchasing Act (S. 1128), introduced by Sens. Ron Wyden (D-OR) and John Sununu (R-NH) would prohibit drug companies from passing on advertising costs in the prices they charge to programs such as Medicaid. According to Wyden, drug companies already receive federal tax deductions for their advertising costs, as do most American businesses.
Drugs advertised directly to consumers are among those on which Federal programs spend the most money for outpatient care, according to Wyden, who argues that studies have indicated that advertising, not medical need, may have contributed to national upswings in prescriptions for those drugs.
The bill also requires a report to Congress on how drugs advertised directly to consumers affect Federal programs in terms of purchase volume, cost, and their suitability for patients’ medical needs.
In addition, the measure seeks to reduce the costs of directly marketed prescription drugs in Medicaid, Medicare and other Federal programs by requiring the Secretary of Health and Human Services to adjust certain formulas for those drugs in the Medicaid rebate program. This would require drug companies to have a pricing agreement for medicines dispensed under Medicaid.
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