Judge blocks Trump administration's move to require drug prices in TV ads

Cheryl Sanders
July 10, 2019

"No matter how vexing the problem of spiraling drug costs may be, [Health and Human Services] can not do more than what Congress has authorized", US District Court Judge Amit Mehta ruled on Monday, blocking the order, which was due to go into effect on Tuesday.

Former Celgene CEO Bob Hugin on President Trump's efforts to rein in drug prices and reform the US health-care system.

The rule from the Department of Health and Human Services requiring drugmakers to include the list price of their products in television ads was struck down by a federal judge.

"The price people pay for their drugs is not the list price anyways", Kottler told Yahoo Finance.

In response to the final rule, three drug companies-Amgen, Merck and Eli Lilly-filed suit, claiming HHS needed congressional approval to impose such a requirement.

Drugmakers have long argued that list prices do not reflect out-of-pocket costs for most US consumers or take into account the actual prices paid after discounts and rebates negotiated with health insurers and pharmacy benefit managers to ensure patient access to the medicines.

"Requiring the inclusion of drugs' list prices in TV ads is the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the health care they receive", Azar said at the time.

According to the decision in the case, HHS sought, in adopting the rule, to do more than exercise its basic power to establish rules and regulations for the running and management of the federal public health programs of CMS. "The responsibility rests with Congress to act in the first instance". "But no matter how vexing the problem of spiraling drug costs may be, HHS can not do more than what Congress has authorized", Mehta concluded. The ruling on Monday was a blow to the Trump administration's efforts to pressure drugmakers to lower drug prices.

The U.S. Justice Department defended the rule in court, saying it met a standard the U.S. Supreme Court set in 1985, when it held the government can force advertisers to disclose factual, non-controversial information.

"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. It mandates that drug makers include the price for any medication that costs more than $35 for a month's supply or the usual course of treatment.

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