WASHINGTON – U.S. Senate Majority Whip Dick
Durbin (D-Ill.) and U.S. Senator Chuck Grassley (R-Iowa) today released the
following statement after the Government Accountability Office (GAO) released a
report they had requested
entitled, “Prescription Drugs: Medicare Spending on Drugs with
Direct-to-Consumer Advertising,” which found direct-to-consumer (DTC)
advertisements of prescription drugs drive drastic increases in Medicare costs:
“This GAO report found that Pharma’s $6 billon
annual spending spree on TV, magazine, and internet advertisements for the
newest and most expensive drugs balloons Medicare’s costs. Drugs that are
advertised direct-to-consumer accounted for nearly 60 percent of Medicare’s
medication budget. GAO documented Pharma’s tried and true scheme: America’s
seniors are being targeted with ads for expensive medications without
disclosing the price of the drug, then Medicare spending is inflated to the
tune of tens of billions of dollars each year. We plan to introduce new
legislation to bring transparency to Pharma’s unfair drug advertising practices
by requiring the disclosure of the product’s cost, which will lower drug
spending and empower patients.”
Below
are some key findings from the GAO report:
- Pharmaceutical
manufacturers spent approximately $6 billion for each of the years
2016-2018 on DTC drug advertisements (increasing spending each year over
year), half of which was concentrated among drugs that treat chronic
conditions of arthritis, diabetes, and depression. Virtually all
spending was for more expensive, brand-name drugs.
- Two-thirds
of this spending ($12B out of $18B total) over this three-year period was
concentrated on just 39 drugs, half of which had newly entered
market. For each of those 39 drugs, their manufacturers spent over
$100 million to run commercials. Humira was the highest-advertised
drug, with $1.4 billion in DTC spending during 3 year window – followed by
Lyrica ($913 million), and Trulicity ($655 million).
- During
this three year period, Medicare spent a total $560 billion on drugs, and
58 percent were on drugs that were advertised.
- Advertised
drugs accounted for 8 percent of total Medicare Part D drugs used but 57
percent of that spending.
- Among the
top 10 drugs with the highest cost to Medicare, four were also in the top
10 for advertising spending (Humira, Eliquis, Keytruda, Lyrica).
For
years, Durbin and Grassley have advanced legislative proposals to require
pharmaceutical companies to disclose the list prices of their prescription
drugs when choosing to run DTC advertisements, including passing a bipartisan
amendment through the Senate in 2018. Studies show that the average
American sees nine DTC ads each day—which steer patients to the most expensive
drugs regardless of whether it is clinically appropriate for a patient or if a
lower-cost generic is available.
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