Trump Rule Requiring Drug Prices in TV Ads Blocked -- Update

Date : 07/09/2019 @ 3:25AM
Source : Dow Jones News
Stock : AbbVie Inc (ABBV)
Quote : 74.76  0.26 (0.35%) @ 7:38PM

Trump Rule Requiring Drug Prices in TV Ads Blocked -- Update

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By Stephanie Armour 

A federal judge on Monday blocked a Trump administration rule requiring drugmakers to put prices in television ads, a central part of the president's push to lower the cost of prescription medications.

The decision from U.S. District Judge Amit Mehta in Washington, D.C., is the latest blow to a number of administrative actions on health care. Judge Mehta sided with drug companies, saying the Health and Human Services Department rule would violate free speech and exceeded the agency's statutory authority.

"But no matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized," he wrote in his decision. "The responsibility rests with Congress to act in the first instance."

The lawsuit was brought by three pharmaceutical companies: Merck & Co., Eli Lilly & Co. and Amgen Inc.

The rule, completed in May, was part of President Trump's broader blueprint to lower drug prices and was set to go into effect Tuesday. It required list prices to be included in direct-to-consumer TV ads for most prescription drugs covered by Medicare and Medicaid. The ruling blocks the rule from going into effect.

"We are disappointed in the court's decision and will be working with the Department of Justice on next steps related to the litigation," an HHS spokeswoman said in a statement. "President Trump and Secretary [Alex] Azar remain focused on lowering drug prices and empowering patients through more transparency in healthcare costs."

The Justice Department declined to comment.

The administration said the goal of the rule was to increase transparency, which would put pressure on drugmakers to keep prices low. It argued that list prices matter to patients, especially consumers with high deductibles who must often pay the full amount. The U.S., one of the few countries to allow TV ads for drugs, currently requires them to disclose side effects and other information.

"If drug companies are ashamed of those prices -- lower them!" Mr. Trump tweeted in May.

Drugmakers have opposed the price mandate, saying the rule could improperly limit free speech and that providing only the list price would confuse and mislead consumers who might think they have to pay more than they actually would. The list price is the figure initially set by the drugmaker, but it is different from what consumers generally pay because it doesn't take into account rebates, discounts and insurance payments.

An industry trade group, PhRMA, said Monday it has taken its own, voluntary steps to help improve transparency.

"PhRMA has long been concerned about the administration's rule requiring list prices in direct-to-consumer (DTC) television advertising," it said in a statement.

In 2017, more than $5.5 billion was spent on prescription-drug ads, including nearly $4.2 billion on TV ads. Commonly advertised drugs include AbbVie Inc.'s Humira, which has a list price of more than $5,000 a month, along with Pfizer Inc.'s Lyrica, which costs $468 a month, according to data provided under the rule.

"Today's ruling is a step backward in the battle against skyrocketing drug prices and providing more information to consumers," AARP, a group for people age 50 or older, said Monday in a statement.

Write to Stephanie Armour at stephanie.armour@wsj.com

 

(END) Dow Jones Newswires

July 08, 2019 22:10 ET (02:10 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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