Medicare Compliance & Reimbursement

Congress looking closer at advertising influence.

Two senators want to reduce providers' Medicare and Medicaid prices for drugs that are advertised directly to the consumer.
 
Senators Ron Wyden (D-OR) and John Sununu (R-NH) are leading a bipartisan effort to reduce consumer-directed prescription-drug advertising costs to federal programs, such as Medicare and Medicaid, according to a May 26 joint press release.
 
Why? Because drug companies already receive advertising-cost tax deductions from the federal government, these costs shouldn't get passed on to Medicare and Medicaid as a part of the drug's price, the senators say.
 
Act Requires Study Of Ad-Price Correlation

The senators created the Pharmaceutical Advertising and Prudent Purchasing Act, which would prevent drug companies from billing such advertising costs to federal programs. The legislation also requires a report to Congress about direct consumer drug advertising's impact on Medicare and Medicaid's purchase volume and costs.
 
"It is no secret that advertising affects the utilization - and price of - many prescription drugs," Sununu says. The legislation would mandate Congress' exploration of the drugs' medical necessity versus advertising influences on providers and patients.

'Flavor Of The Month' No More

The senators also created the act with the hopes that it would cause the feds to step back and reassess their own drug-buying habits.
 
"It's also important to make sure that when the federal government buys drugs, they're buying drugs patients need and not just the pharmaceutical flavor of the month," Wyden adds.
 
To read the press releases, go to http://wyden.senate.gov/media/2005/05262005_drug_advertising_bill.html or http://www.sununu.senate.gov/pressapp/record.cfm?id=238274&&year=2005&.
 
Lesson learned: If Congress passes this legislation, providers won't be able to include advertising costs in their drug prices for Medicare and Medicaid.