US judge halts rule requiring drug prices in TV ads

Lawrence Kim
July 9, 2019

Mehta ruled in favor of three major pharmaceutical companies Monday evening, blocking the Trump administration's final rule to disclose prescription drug list prices in direct-to-consumer television advertisements.

The Department of Health and Human Services rule had been slated to take effect Tuesday.

FILE - In this October 25, 2018, file photo, President Donald Trump talks about drug prices during a visit to the Department of Health and Human Services in Washington.

Judge Mehta granted the plaintiff's motion to stay the final rule's effectiveness, writing that the Social Security Act does not authorize HHS to require wholesale drug prices from pharmaceutical companies.

"Having applied the tools of statutory interpretation here, the court finds that HHS's adoption of the WAC Disclosure Rule exceeds the rulemaking authority that Congress granted the agency under the SSA", Mehta wrote.

"Although we are not surprised by the objections to transparency from certain special interests, putting drug prices in ads is a useful way to put patients in control and lower costs, and as seen from the president's executive order, we are working on many different avenues for delivering transparency", HHS spokeswoman Caitlin Oakley said. While it might seem absurd to expect consumers to drop everything and open their web browsers after seeing a TV ad they weren't looking for in the first place, drug companies' influence in Congress - they spent $4.1 billion on lobbying over the last 20 years, according to OpenSecrets.org, more than any other industry - means they tend to get what they want. HHS said the 10 most commonly advertised drugs had list prices of $488 to $16,938 per month or for a usual course of therapy.

Amgen, Merck, and Eli Lilly, three of the largest USA drug companies, and the Association of National Advertisers filed the lawsuit last month, claiming HHS lacked the legal authority to enforce the rule, which would have mandated that pharmaceutical ads display the list price of a 30-day supply of any drug covered under Medicare or Medicaid costing more than $35.

The Health and Human Services Department said it was "disappointed" with the ruling and will consult with the Justice Department on the next steps. They fear that advertising list prices may scare patients away from drugs they could afford with their health insurance coverage.

While the new rule does not have an enforcement mechanism, Azar said failing to include the price would be considered a deceptive trade practice and could prompt lawsuits by industry rivals.

Other reports by Click Lancashire

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