AMA to Vote on Requiring Drugmakers to Include Drug Prices in DTC Ads

In its upcoming meeting, the American Medical Association (AMA) is set to vote on a resolution which could lead regulators to require drug prices to be included in direct-to-consumer (DTC) ads. While the AMA doesn’t have the direct power to push pharmaceutical companies to include prices in their promotions, they do have influence over industry regulators including the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC).

In the past few years, the pharmaceutical industry has faced increasing scrutiny over their pricing practices, with the US government launching investigations into price hikes. While drugmakers argue that the cost of R&D and clinical trials are major factors in soaring drug costs, critics of the pharmaceutical industry do not always believe that these variables account for rising prices.

Biologic drugs and those that service small rare disease populations are often the most expensive, and drugmakers promote these products through a variety of means. While marketing to physicians remains important because they make the prescribing decisions, substantial resources are put into DTC ads to encourage patients to ask for branded drugs by name.

According to the AMA, in 1999 drugmakers spent $791 million on DTC advertising; seven years later, this number rose to a staggering $4.8 billion. DTC advertising of pharmaceuticals is only permitted in one other country besides the US: New Zealand.

In 2015, the AMA took a stand against DTC advertising and advised regulators to end the practice in the US. Recent efforts to crack down on advertisers that don’t comply with FDA regulations have kept drugmakers in check, but TV, print and online ads for drugs and medical devices remain prominent.

The AMA will also vote on other regulations at its annual meeting that would have a direct impact on the pharmaceutical industry. Of note is a resolution that would require pharmaceutical companies to disclose their reasoning behind setting prices for new drugs, and increasing prices for old ones. The meeting is set to take place between June 10 and June 14.