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Health and Human Services Secretary Alex Azar at the National Academy of Sciences last year. Photo: Alex Wong/Getty Images

More transparency about the cost of prescription drugs is unlikely to directly lower their price, experts say, poking a hole in a buzzy Washington talking point.

Why it matters: "Transparency" comes up often in discussions about how to lower drug prices. And though more information is undoubtedly important, something has to be done with that information to actually get costs down.

The big picture: We usually don't know how much insurance plans end up paying for most drugs, and we also don't know how much of a cut the system's middlemen keep for themselves. Transparency efforts often focus either on illuminating how money moves through the drug supply chain, or requiring drugmakers to justify hikes in their list prices.

  • This information may have a shaming effect, but drug companies would still be free to charge what they want. And consumers often have limited or no ability to choose a cheaper drug.
  • There are exceptions — like the new ban that on "gag clauses" that prevented patients from knowing when paying cash would be cheaper than using their insurance. But so far those circumstances have been relatively limited.

Yes, but: Transparency measures still matters, because “it’s hard to come up with really reasonable solutions if you’re really working in the dark," said Vanderbilt's Stacie Dusetzina.

  • It could help employers and insurance plans “understand where they could do a better job squeezing out some of this excess profit," she said, but ultimately "it’s necessary but not sufficient for reducing drug prices.”

Details: A handful of states have already passed laws requiring drug companies to report the rationale behind their price spikes, but most don't do anything to actually block or prevent those spikes.

  • Maryland passed penalties for "price gouging," but the law has been found unconstitutional. The state has asked the Supreme Court to hear the case.
  • A Health Affairs analysis of California's transparency law found that it is unlikely to have much of an impact on drug spending unless it's paired with additional incentives for consumers to use lower-priced drugs.

The bottom line: "Transparency can help the public and policy makers make more informed decisions about what to do about high drug prices - who to target, what policies to put in place, etc," said Walid Gellad, a professor at the University of Pittsburgh. "Just the transparency alone is unlikely to lower prices."

Go deeper

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: Supreme Court backs religious groups on New York COVID restrictions.
  3. Economy: Safety nets to disappear in DecemberAmazon hires 1,400 workers a day throughout pandemic.
  4. Education: U.S. public school enrollment drops as pandemic persists — National standardized tests delayed until 2022.
  5. Cities: Los Angeles County issues stay-at-home order, limits gatherings.
  6. World: London police arrest dozens during anti-lockdown protests — Thailand, Philippines sign deal with AstraZeneca for vaccine.

Tony Hsieh, longtime Zappos CEO, dies at 46

Tony Hsieh. Photo: FilmMagic/FilmMagic

Tony Hsieh, the longtime ex-chief executive of Zappos, died on Friday after being injured in a house fire, his lawyer told the Las Vegas Review-Journal. He was 46.

The big picture: Hsieh was known for his unique approach to management, and following the 2008 recession his ongoing investment and efforts to revitalize the downtown Las Vegas area.

Dan Primack, author of Pro Rata
9 hours ago - Economy & Business

The unicorn stampede is coming

Illustration: Annelise Capossela/Axios

Airbnb and DoorDash plan to go public in the next few weeks, capping off a very busy year for IPOs.

What's next: You ain't seen nothing yet.