Ruling shoots down U.S. bid to get drug prices listed in ads
A federal judge has ruled that President Donald Trump’s administration cannot force pharmaceutical companies to disclose the list prices of their drugs in television ads, dealing a blow to one of the president’s most visible efforts to pressure drug companies on lowering patients’ costs.
Judge Amit Mehta of U.S. District Court in the District of Columbia ruled Monday that the Department of Health and Human Services exceeded its regulatory authority by seeking to require all drugmakers to include in their television commercials the list price of any drug that costs more than $35 a month. The rule was to take effect this week.
Mehta, who was nominated to his position by President Barack Obama in 2014, did not delve into whether the proposed rule violated the First Amendment. He relied instead on whether the Department of Health and Human Services had overstepped its bounds because it sought to issue the rule under the authority of the Social Security Act.
“That policy very well
could be an effective tool in halting the rising cost of prescription drugs,” the judge wrote. “But no matter how vexing the problem of spiraling drug costs may be, [the Health and Human Services Department] cannot do more than what Congress has authorized. The responsibility rests with Congress to act in the first instance.”
Merck, Eli Lilly and Amgen had sued to block the television-ad rule in June, arguing that forcing companies to disclose their list prices was beyond the reach of the federal government as well as a violation of the First Amendment. The companies also said many patients have health insurance that lowers their out-of-pocket costs, and seeing the higher list price might lead them to stop taking drugs they needed.
The Trump administration, including Health and Human Services Secretary Alex Azar, had argued that requiring such disclosure could shame the drugmakers into lowering their prices.
In a statement, Eli Lilly said it was pleased with the ruling. “We are committed to working with stakeholders across the health care system to find better solutions for the larger issue, namely, lowering out-of-pocket costs for Americans who still struggle to pay for their medicines,” the company said.
AARP, which represents older Americans, expressed disappointment in the judge’s decision. “Today’s ruling is a step backward in the battle against skyrocketing drug prices and providing more information to consumers,” the group said. “Americans should be trusted to evaluate drug price information and discuss any concerns with their health care providers.”
On Monday night, Judd Deere, a spokesman for the White House, said: “It is outrageous that an Obama-appointed judge sided with big pharma to keep high drug prices secret from the American people, leaving patients and families as the real victims.”
And Caitlin Oakley, a spokesman for the Department of Health and Human Services, said the administration was disappointed and was consulting with the Justice Department on what to do next. “Although we are not surprised by the objections to transparency from certain special interests,” she said, “putting drug prices in ads is a useful way to put patients in control and lower costs.”
Trump’s adviser Kellyanne Conway said the administration may continue to pursue the effort in the courts. “The president is not a quitter,” Conway said Tuesday at the White House. “The president is very fond of the rule that would compel drug manufacturers to list their prices on TV. Again, what are they hiding? We want transparency.”
A spokesman for the Justice Department did not immediately respond to phone calls and emails requesting comment on whether the administration would immediately appeal the ruling.
David Mitchell, the founder of Patients for Affordable Drugs, which advocates lower drug prices, said his group never thought the television-ad rule would get drugmakers to reduce their prices. “But if you take that away, at least it was something visible they could point to that they’d done,” he said.
Many drugmakers, including Lilly and Amgen, have created websites to disclose prices, but argued that including them in ads could result in patients being scared away from seeking treatment. The Trump administration had said that forcing drugmakers to disclose prices for drugs, which have risen sharply in recent years, could push down list prices.
The administration’s effort to provide transparency in drug pricing was seen as largely symbolic — a way to hold drugmakers accountable for their prices, even if it did not directly do anything to lower costs and even if those prices were not what consumers usually paid.
Last week, the president said he would be issuing an executive order on drug pricing, but the breadth of the order remained unclear. His administration has proposed other moves, including allowing older adults to more directly benefit from drug rebates in Medicare, and tying the costs of some drugs to their prices in other countries.
Republicans and Democrats in Congress also have put forward a range of legislation that would address the issue, from limiting out-ofpocket costs for people covered by Medicare to allowing the federal government to directly negotiate the price of drugs.
Last year, Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee, and Sen. Dick Durbin, D-Ill., proposed legislation that was similar to the Trump administration’s proposal. It passed in the Senate in August, and in May, the senators said they were still pursuing the legislation.
Trump has faced hurdles — some of his own making — as he has sought to make changes either unilaterally or with the help of Democrats. In May, the president said during a speech in the Roosevelt Room that his administration would work with Democrats to eliminate surprise medical billing — the practice of billing patients with undisclosed costs at the time of care.
He also singled out the drug-price disclosure rule.
The rule was “going to be something, I think, very special,” Trump said. “You may have heard about it. Maybe not. But it’s the beginning of a plan of transparency.”