Federal Judge Blocks Rule Requiring Drug Prices to Be Revealed in TV Ads

A federal judge on July 8 stopped a White House initiative that would have required pharma companies to disclose the sticker price of their drugs in TV ads.

Under the new rule (pdf), which was finalized by Department of Health and Human Services (HHS) in May, if a medicine’s list price is more than $35 a month, it would be obliged to show it in its commercials. The rule is considered the Trump administration’s major step to realize a blueprint to lower prescription costs.

The rule was blocked hours before it was set to take effect when U.S. District Judge Amit Mehta in Washington decided that HHS lacks the legal authority to make drug manufacturers include the cost of their drugs in TV commercials.

In his 27-page ruling (pdf), the Obama appointee explained that he was not questioning the motives of HHS or the merit of the new rule, but simply that HHS don’t have authority from Congress.

“To be clear, the court does not question HHS’s motives in adopting the … disclosure rule,” U.S. District Judge Amit Mehta wrote. “Nor does it take any view on the wisdom of requiring drug companies to disclose prices. That policy very well could be an effective tool in halting the rising cost of prescription drugs. But no matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized.”

“The responsibility rests with Congress to act in the first instance,” Mehta wrote.

HHS spokeswoman Caitlin Oakley said the administration was disappointed by the ruling and “will be working with the Department of Justice on next steps related to the litigation.” The administration could appeal the ruling, and it could also ask Congress to specifically authorize requiring drugmakers to disclose their prices. The Senate and the House are working on a package of bills that aim to reduce health care costs for insured patients, and drug prices are one of lawmakers’ biggest targets.

“It is outrageous that an Obama appointed judge sided with big PhRMA to keep high drug prices secret from the American people, leaving patients and families as the real victims,” White House spokesman Judd Deere said in a statement, reported Reuters.

PhRMA, the Pharmaceutical Research and Manufacturers of America, is a trade association for drug manufacturers. According to data from OpenSecrets, a watchdog website that tracks money in American politics, PhRMA has spent $27,989,250 in 2018 to claim the fourth place on the list of the country’s top spenders on lobbying.

The lawsuit was brought by three major manufacturers: Merck, Eli Lilly, and Amgen. HHS Secretary Alex Azar was once a top executive of Indianapolis-based Eli Lilly.

AARP Vice President Nancy LeaMond also called the ruling a disappointment. “Today’s ruling is a step backward in the battle against skyrocketing drug prices,” she said in a statement. “Americans should be trusted to evaluate drug price information and discuss any concerns with their health care providers.”

The Associated Press contributed to this report.