A DC Circuit court upheld a federal judge’s ruling striking down the Department of Health and Human Services’ new rule requiring drug companies to disclose the price of a 30 day supply in advertising.
Merck, Eli Lilly and Amgen argued that disclosing drug prices in advertisements violates their first amendment rights by controlling and compelling commercial speech, and that DHH did not have the authority to enact the rule.
The Trump administration argued DHH was given authority by law to run the Medicare and Medicare programs, which provided $240 billion in prescription drugs to the elderly and poor in 2016. The Department believed drug pricing transparency in advertisements would help control costs.
“This lack of transparency threatens Medicare and Medicaid’s sustainability and comes at the expense of American taxpayers,” the government wrote in its brief.
“What I say to the companies is if you think the cost of your drug will scare people from buying your drugs, then lower your prices,” Health and Human Services Secretary Alex Azar said when the regulation was announced.
The three-panel appeals court judges steered clear of the free speech argument and instead ruled against DHH finding that the new rule would be too confusing for consumers since the MSRP price listed in the advertisement “bears little resemblance to the price beneficiaries actually pay.”
“The Department acted unreasonably in construing its regulatory authority to include the imposition of a sweeping disclosure requirement that is largely untethered to the actual administration of the Medicare or Medicaid programs,” wrote U.S Circuit Judge Patricia Millett.
It is now left to Congress to control the ever increasing cost of prescription drugs. However, due to coronavirus, legislation in the Senate has stalled. Senator Charles Grassley (R-Iowa) and Richard Durbin (D-IL) is working to get his bill heard later this summer. Majority Leader Mitch McConnell (R-KY), who has taken more than $200,000 from pharmaceutical companies this election cycle, is reluctant to allow the measure to the floor.
The bipartisan bill caps drug price increases at inflation level and imposes a $3,100 limit on out-of-pocket cost for seniors and American’s with disabilities.
A bill coming up for vote in the House seeks to control drug cost by allowing DHH to negotiate drug prices with manufactures.
Yet to be seen is whether Democrats and Republicans can come together and pass legislation that will benefit the American consumer.
“Even in the midst of a pandemic that threatens all of us, Big Pharma fought for months in court to prevent patients from knowing the price of their drug. Look no further than this lawsuit to understand what matters most to the pharmaceutical industry, to continue to advance our bipartisan legislation to get American patients the information they deserve to hear about drug prices.” – U.S. senators Richard Durbin, an Illinois Democrat, and Charles Grassley, a Republican of Iowa, wrote in a joint statement
Appeals court skeptical of Trump rule on TV drug ads, The Hill, January 13, 2020
Panel Blocks Rule Forcing Drugmakers to Show Prices in TV Ads, Courthouse News
Court strikes down Trump rule that drugmakers disclose price, ABC News, June 17, 2020
Merck, Lilly and Amgen win again in lawsuit over drug prices in TV ads. Will it stick?, FiercePharma, June 18, 2020
