Johnson & Johnson will voluntarily disclosethis price in its direct-to-consumer commercials, starting with adsfor blood thinner Xarelto by late March. (Photo:Shutterstock)

Johnson & Johnson appears to have listened to PresidentDonald Trump's State of the Union Address.

Trump, in a portion of his speech devoted to health care, calledon pharmaceutical companies to reveal “real prices” – presumably areference to an administration proposal that would requiredrugmakers to show the full sticker price, or list price, ofmedicines in TV ads. J&J is jumping the gun, with plans tovoluntarily disclose this price in its direct-to-consumercommercials, according to a blog post released Thursday. Thecompany will start with ads for blood thinner Xarelto by lateMarch, and then move on to other medicines. It's the firstdrugmaker to announce such a step.

Related: Eli Lilly says 'no' to TV list prices but offers acompromise

The move seems designed to give Trump a win, and it appears tohave earned J&J a bit of goodwill: Health and Human ServicesSecretary Alex Azar released an approving statement Thursdayevening. But it won't do anything to dismiss more threatening drug-price proposals thatstill loom for pharma, and may not give patients much clarity,either.

The idea behind the administration's proposal is that byrequiring drugmakers to prominently display their often sky-highlist prices, it may shame them into lowering them. Pharma opposesit, arguing that list prices are meaningless to most Americansbecause health plans often negotiate huge discounts with drugmakersand consumers usually pay only a portion of a lower pricethemselves. In fact, drug companies have claimed that showing aninflated price in TV ads may discourage people from seeking neededmedicines.

In a mitigating tactic, Johnson & Johnson's planned pricedisclosure will include an estimate of what typical patientsactually pay for drugs, something that Trump's proposed mandatedoesn't include. That will make the much higher list price muchless scary. But it also could confuse patients exposed to ahigher-than-average price because they pay co-insurance on somedrugs or have a high deductible plan. It's tough to fit thosenuances into a 30-second TV spot.

This isn't exactly what the administration wants. But it'scloser than Eli Lilly & Co's move to direct consumers who seeits ads to a website with hand-picked pricing information. And itcould be just enough for the president to declare victory and moveon, without much in the way of pain for J&J or any firms thatelect to copy it. It's reminiscent of the industry's move to freezeprices in 2018 after the president began specifically criticizingcertain firms. Despite the fact that those freezes were temporaryand that the few price cuts largely meaningless, the strategy kindof worked.

Even if the administration doesn't see right through this andJ&J doesn't end up having to disclose list prices alone, itwill only be a small reprieve. Moreover, the price-shaming measurepales in comparison to Trump's most dangerous proposal, which wouldtie the price of certain drugs paid for by the government to themuch lower prices charged for the same medicines in othercountries. (This proposal also got called out obliquely in theState of the Union.)

Potential Democratic presidential candidates Sherrod Brown andAmy Klobuchar combined with House Democrats Thursday to announce aneven more damaging bill that would give the government enhancedpower to negotiate drug prices as well as the ability to stripdrug-patent exclusivity from firms that don't play ball.

Both plans would significantly bring down prices and hurtpharma's bottom line. Neither will be averted with an ad-tweak orfive-month price hike pause. The sooner pharma comes up with abetter answer for how it prices its medicines, the better.

Read more:

• TV list prices for drugs could be a turnoff forconsumers, study says
• Listing drug prices on TV: Does it reallybenefit consumers?
• Drug price transparency takes a stepforward

Max Nisen ([email protected]) is aBloomberg Opinion columnist covering biotech, pharma and healthcare. He previously wrote about management and corporate strategyfor Quartz and Business Insider. This column does notnecessarily reflect the opinion of the editorial board or BloombergLP and its owners. To contact the editor responsible forthis story: Beth Williams [email protected]

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