Judge Grants Drugmakers Stay on HHS Price Disclosure Rule


The narrow ruling by U.S. District Judge Amit Mehta in Washington, D.C., struck down a requirement that was set to go into effect within hours, on Tuesday. Prescription drugs are not purchased in the same manner as laundry detergent or shampoo; "list prices" can be meaningless in light of insurance coverage, coupon programs, and purchasing agreements. Nor does it take any view on the wisdom of requiring drug companies to disclose prices.

The United States District Court for the District of Columbia has vacated the Trump administration's rule requiring the disclosure of wholesale acquisition costs (WACs) for drugs in direct-to-consumer television advertising. "Neither the act's text, structure, nor context evince an intent by Congress to empower HHS to issue a rule that compels drug manufacturers to disclose list prices", he wrote. "The responsibility rests with Congress", says the decision, to act on the matter of using such a policy as WAC disclosure to address rising drug costs. According to the drug makers, the rule used "unprecedentedly broad construction of the agency's statutory authority", violated the First Amendment, and would have created confusion among consumers because most patients will not likely pay list prices for their therapies.

The television-ad rule had the support of both the Trump administration and consumer rights advocates. The pharmaceutical companies [pharma-terorrists] - Amgen, Merck, and Eli Lilly - were joined in the lawsuit by the Association of National Advertisers.

"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", Oakley added. Those that sued after the Trump administration's announcement in May cited First Amendment grounds.

The pharma industry has insisted that it is unfair as the list price does not take into account discounts or rebates that might be offered, did not give a reflection of patient out-of-pocket costs, and that the Department of Health and Human Services (HHS) overstepped its regulatory powers in ordering the move. 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.

HHS said it was disappointed with the ruling and would work with the Department of Justice on next steps related to litigation.

Critics of the move had also pointed out that the proposal contained no mechanism to enforce the WAC rule in ads, and would rely on industry self-regulation.