The Future of Drug-Pricing Transparency

From the New England Journal of Medicine

By William B. Feldman, MD, DPhil, MPH; Benjamin N. Rome, MD; Jerry Avorn, MD; Aaron S. Kesselheim, MD, JD, MPH

SUMMARY: This NEJM Perspective reviews a federal "Transparency in Coverage" rule requiring health insurers to disclose both list prices and historical net prices for medications and to provide patients with personalized cost-sharing estimates before they fill prescriptions. Feldman, Rome, Avorn, and Kesselheim examine the rule's potential to empower patients and payers with information previously obscured by the pharmaceutical supply chain's complex pricing structures. The piece notes significant industry opposition to the rule and assesses its prospects under the incoming Biden administration. The authors situate the rule within the broader context of pharmaceutical pricing opacity, noting that patients and prescribers have historically lacked access to the actual prices paid for drugs at various points in the supply chain.

BACKGROUND: Drug pricing in the United States has long been characterized by opacity, with list prices, net prices, and patient out-of-pocket costs often diverging significantly and remaining hidden from patients and prescribers.

KEY FINDINGS: A federal "Transparency in Coverage" rule requires insurers to disclose list and historical net prices for medications and to provide personalized cost-sharing estimates to patients. Despite industry opposition, the rule was assessed as likely to endure under the Biden administration.

IMPLICATIONS: Price transparency requirements could shift bargaining dynamics and empower patients to make better-informed decisions, but their effectiveness depends on sustained regulatory enforcement.