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Federal Judge Sides with Pharma: Trump Admin Can’t Force Companies to List Drug Prices in Ads


The Trump Administration’s plans to force drug companies to include pricing information in drug ads just failed in a big way. The Department of Health and Human Services (HHS) drafted a rule introduced by Sen. Chuck Grassley (R-Iowa) that required pharmaceutical companies to include list prices of drugs in advertisements. On Monday, though, a federal court blocked the rule as an improper exercise of executive authority.

Several pharmaceutical companies filed suit to stop the HHS rule from going into effect, claiming that forcing pricing disclosures is not only unwise, but also violates their First Amendment rights. Judge Amit P. Mehta, however, decided the case on neither ground; the court’s ruling was that HHS simply did too much. As a federal administrative agency and part of the executive branch, HHS must confine its rules to the parameters set out by Congressional legislation.  Striking down the rule, Judge Mehta wrote:

To be clear, the court does not question HHS’s motives in adopting the [rule], 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.

According to proponents of the rule, it would improve transparency, provide more information to consumers, and stimulate healthy competition. Drug insiders, however, largely disagree. 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. Furthermore, there can be real danger in publicizing price information for medications: ad-induced sticker shock will deter those in need of medical care from seeking it in the first place.

Reacting to HHS’ loss in court, the Trump administration doubled down on is position that the rule would have been good for patients:

HHS spokeswoman Caitlin Oakley said in a statement, “We are disappointed in the court’s decision and will be working with the Department of Justice on next steps related to the litigation.”

“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.

[screengrab via JIM WATSON/AFP/Getty Images]

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Elura is a columnist and trial analyst for Law & Crime. Elura is also a former civil prosecutor for NYC's Administration for Children's Services, the CEO of Lawyer Up, and the author of How To Talk To Your Lawyer and the Legalese-to-English series. Follow Elura on Twitter @elurananos