The U.S. Court of Appeals upheld a ruling that the Trump administration does not have the legal authority to mandate that drug companies disclose the list price of medications in television advertisements.
The U.S. Court of Appeals upheld a ruling that the Trump administration does not have the legal authority to mandate that drug companies disclose the list price of medications in television advertisements.
The three-panel Appeals court maintained a July 2019 ruling made by U.S. District Judge Amit Mehta that followed a lawsuit brought by Merck & Company, Eli Lilly and Company and Amgen, as well as an advertising trade association that claimed the Department of Health and Human Services does not have the legal authority to force the companies to comply with the price disclosure mandate. In his ruling last year, Mehti said HHS lacked Congressional authority to compel the pharmaceutical companies to disclose their list prices.
It was a ruling that the Court of Appeals agreed with. According to ABC News, the appellate decision was unanimous. The three-judge panel said HHS “overstepped its legal authority by requiring disclosure under the umbrella of its stewardship of Medicare and Medicaid,” ABC reported.
In the court’s findings, Judge Patricia Millet wrote that HHS had acted unreasonably when it asserted it had the authority to impose “a sweeping disclosure requirement that is largely untethered to the actual administration of the Medicare or Medicaid programs.” Millet added that there was no “reasoned-statutory basis” for the departments “far-flung reach and misaligned obligations.”
The latest ruling is a blow to the Trump administration’s goal of reducing drug costs in the United States. The administration had viewed the addition of list prices in ads as something of a way to shame the pharmaceutical companies and the insurance industry, as well as force companies to lower the cost of their medications by giving patients and prescribing physicians greater leverage over their treatments. HHS Secretary Alex Azar touted the price disclosure plan when it was first implemented. Azar said including the list price of a drug in television advertisements is the “single most significant step” taken toward giving patients greater information about the cost of healthcare. Even though the prices are not the retail costs, Azar said those prices still matter, particularly to those patients who have a high-deductible insurance plan or who are uninsured. The industry though argued in its lawsuit that the list price of a drug is not what consumers tend to pay, which would have created confusion for them.
Following the Court of Appeals ruling, the White House issued a statement lambasting the decision.
“It makes absolutely no sense to keep patients in the dark on the true cost of care, and only the ‘D.C. Swamp’ would support such a thing. While big pharma will do everything they can to avoid even a conversation on their astronomical list prices, President Trump remains committed to making pricing information available prior to the delivery of care,” spokesman Judd Deere said, according to ABC.
