On Monday, July 8, U.S. District judge Amit Mehta sided with drugmakers over the Trump administration. The judgment strikes down a U.S. Health and Human Services (HHS) rule, starting July 9, that would require pharmaceutical companies to reveal wholesale drug prices in TV ads.
Judge Mehta said that the HHS lacked authority from the U.S. Congress to force drug manufacturers to disclose these prices. Mehta stated that “(N)o matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized.”
On May 8, HHS Secretary Alex Azar announced the rule. The wholesale, or list, prices would be included in a T.V. ad if it was $35 or more for a month’s supply. HHS said the ten most commonly advertised drugs had list prices of $488 to $16,938/month.
This was part of President Trump’s “blueprint” to drive down the costs of prescription drugs. By making the general public aware of wholesale costs, the objective was to possibly embarrass drug companies or drive away potential customers, so that those companies would be forced to lower prices.
On June 14, pharmaceutical companies Merck Co. Inc., Eli Lilly and Co., and Amgen Inc. filed a lawsuit along with the Association of National Advertisers trade group. They argued that the new rule would confuse consumers by disclosing a price that was irrelevant; it didn’t reflect out-of-pocket costs or prices patients paid after negotiations with health insurers and pharmacy benefit managers.
PhRMA, the Pharmaceutical Research and Manufacturers of America, the industry’s largest lobbying group, also felt that the rule could keep some patients from seeking medical care.
The lawsuit alleged that the HHS lacked authority to issue the rule and that it violated drugmakers’ free-speech First Amendment rights.
The U.S. Justice Department argued that the rule met a standard set by the U.S. Supreme Court in 1985, when it stated the government could force advertisers to disclose factual, non-controversial information.
After the ruling, the HHS said in a statement they were disappointed in the court’s judgment and would work with the Department of Justice on next steps in litigation. They went on to say that “President Trump and Secretary Azar remain focused on lowering drug prices and empowering patients through more transparency in healthcare costs.”