PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Letter to Conferees to on Defense and Labor, HHS and Education “Mini-Bus” Package

By at 12 September, 2018, 12:21 pm

Dear Conferees to the Defense and Labor, HHS and Education “Mini-Bus” Appropriations Bill:

SBE Council opposes the Durbin-Grassley amendment within the Defense, Labor, HHS and Education Appropriations minibus. SBE Council urges that the amendment be rejected and stripped from the final minibus package.

●  The amendment would force biopharmaceutical companies to include list prices in direct-to-consumer (DTC) advertisements, and would provide the U.S. Food and Drug Administration (FDA) with $1 million to implement rules requiring these companies to do so.  SBE Council believes this proposed mandate would only confuse the public while wasting resources that are needed to bring new and breakthrough drugs to the marketplace.

As we noted in our August 22 letter to the Senate on the amendment:

●  The mandate would only confuse consumers because it is not relevant to what they pay given health insurance coverage, discounts and other programs.

●  There are significant First amendment concerns with this proposed government mandate. Indeed, we believe as others do, that the amendment would not withstand First Amendment scrutiny. As noted in a July 27 coalition letterto all members of the U.S. Senate signed by SBE Council:

“In addition to the drawbacks for patients and misdirected resources, however, perhaps the most dangerous/unsettling/disturbing aspect of requiring disclosure of list prices in DTC ads is that it raises First Amendment concerns regarding compelled speech. Only limited exceptions allow the government to compel speech, and none of those exceptions apply in this case. As an initial matter, advertising for pharmaceutical products constitutes commercial speech, and the Supreme Court has made clear commercial speech is protected by the First Amendment. Consequently, courts have repeatedly ruled that the government can only compel disclosure of ‘purely factual and uncontroversial information.’  

Compelled disclosure of list prices simply does not meet these conditions. List prices are not ‘purely factual,’ but rather potentially mislead because payers receive discounts, and rebates and most patients pay a different amount out of pocket. Additionally, that information is far from ‘uncontroversial in the current environment, and disclosure in consumer ads of prices higher than what is actually charged would promote controversy.  

With a unified goal of providing beneficial factual information to healthcare consumers, real solutions come from advancing thoughtful public policy discussions, not counterproductive and unconstitutional proposals that create additional regulation to confuse consumers, deter patients from care and raise First Amendment concerns regarding compelled speech.”

●  SBE Council is concerned about the precedent this proposed mandate establishes for the federal government requiring other pricing information in advertising for products and services. What pricing mandate is next?

● The biopharmaceutical industry is not just about big business. Indeed, it’s just the opposite. Among pharmaceutical and medicine manufacturing firms, 57 percent have less than 20 workers, 79 percent less than 100 employees, and 91 percent less than 500 workers. This critical industry is about small entrepreneurial businesses and government mandates that re-direct or waste capital away from innovation, bringing drugs to market, or competing with larger firms only hurts consumers and the quality of our nation’s health care system.

SBE Council remains concerned about and engaged in the issue of health care and health coverage costs, as this is a big challenge for our members and their employees.  But as we have seen with other mandates and red tape heaped upon our health care system, intrusive government regulation only reduces competition and choice in the marketplace and increases costs. The barriers to entry for entrepreneurial firms and innovation also grow higher, or become more entrenched.

Again, SBE Council urges Conferees to reject and strip the amendment from the minibus package. Thank you for considering the views of SBE Council.

Sincerely,

Karen Kerrigan, President & CEO

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