Senate assesses ad costs of drugs

Congress is again trying to influence how prescription drugs are priced.

A bipartisan bill introduced yesterday in the Senate targets prices for prescription drugs available through federal health care programs whose makers advertise the drugs directly to consumers.

The bill would require programs like Medicaid, which was set up for the poor, to eliminate advertising costs passed on by pharmaceutical companies from a drug’s price.

The measure also requires Health and Human Services Secretary Michael O. Leavitt and Veterans Affairs Secretary Jim Nicholson to negotiate a reduced price for drugs in other programs that are directly advertised to consumers.

The goal of the bill is to eliminate advertising costs that are passed on to taxpayers, said Sen. John E. Sununu, a co-sponsor and New Hampshire Republican.

Prescription drug manufacturers, like other U.S. businesses, get a tax deduction from the federal government for their advertising costs.

“Taxpayers shouldn’t have to further subsidize the drug companies’ marketing efforts through Medicare and Medicaid,” said Sen. Ron Wyden, the other co-sponsor and Oregon Democrat.

Pharmaceutical industry officials and free-market proponents say the measure would restrict prescription drug access and information to consumers.

“The legislation is simply misguided,” said Jeff Trewhitt, spokesman for the Pharmaceutical Research and Manufacturers of America, a Washington trade group.

Drug companies spend 10 times more on research and development costs than on advertising expenses, Mr. Trewhitt said.

The bill could infringe on the free-speech rights of the pharmaceutical companies, said Robert Goldberg, director for the medical progress center at the Manhattan Institute, a New York free-market-oriented think tank.

“And what about the public health benefit of direct-to-consumer advertising? It’s an issue these senators haven’t looked at,” Mr. Goldberg said.

The recently introduced bill also mandates that HHS, the federal health agency, put together a report on ways the government could reduce costs from directly advertised drugs in Medicare, the federal health insurance program for the elderly and disabled.

But the bill does not affect the Medicare program or its drug benefit.

Current law forbids the federal government from interfering with price negotiations between health plan sponsors or drug companies. It also prohibits any price controls on drugs.

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