Drug Firms Sue Over Ad Rule -- WSJ
June 15 2019 - 3:02AM
Dow Jones News
By Jared S. Hopkins
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 15, 2019).
Three pharmaceutical companies sued the federal government
Friday to block a proposal requiring drug manufacturers include the
list price of prescription drugs in television ads, the latest
volley by the industry as it faces criticism over escalating cost
of its products.
The lawsuit against the U.S. Centers for Medicare and Medicaid
Services, filed jointly in U.S. District Court by Amgen Inc., Merck
& Co., Eli Lilly & Co. and the Association of National
Advertisers, alleges that the proposed rule violates the First
Amendment by compelling drugmakers to communicate list prices in TV
ads.
The companies and trade organization allege the agency lacks the
authority to enact the mandate, according to the complaint. And
they say the rule will create unnecessary confusion among patients
and may discourage them from seeking treatment or medical
information. The complaint says that few of the 65 million
Americans on Medicaid pay more than an $8 copay for prescription
drugs.
The proposed rule was finalized in May by the U.S. Department of
Health and Human Services and is set to take effect in July. It is
among the efforts by the Trump administration to make health care
more affordable in the U.S. Officials also want to stop billions of
dollars in annual rebates that drugmakers give middlemen in
Medicare that are known as pharmacy-benefit managers.
The government has said the proposed rule would increase
transparency around prices and allow patients to make informed
decisions based on cost. Government officials also have said the
rule could spur drug companies to reduce prices.
President Trump and Health and Human Services Secretary Alex
Azar are committed to providing patients the information they need
to make their own informed health-care decisions, agency
spokeswoman Caitlin Oakley said in response to the lawsuit. "If the
drug companies are embarrassed by their prices or afraid that the
prices will scare patients away, they should lower them," she
said.
The lawsuit wasn't entirely a surprise given the resistance the
industry signaled last year when the rule was proposed. The
Pharmaceutical Research and Manufacturers of America -- the
industry's main trade group, or PhRMA -- had said the rule could
lead some patients to think they have to pay the full list price,
rather than a copay or coinsurance if they have insurance.
The trade group announced its own initiative in which major
drugmakers would voluntarily include price-related information in
television ads by directing consumers to websites where they can
find information on list prices and costs. Few patients pay "list"
prices, which don't take into account rebates, discounts and
insurance payments, but some pay the full price at times, such as
when they haven't met their deductible.
Johnson & Johnson, the world's largest health-care company,
adopted the PhRMA principles but went a step further. The New
Brunswick, N.J.-based firm has been airing a television ad for its
Xarelto blood thinner by briefly showing its list price at the end
of the ad.
Pharmaceutical ads on television have become a common occurrence
since they began airing two decades ago. The spots have also become
a lightning rod in attacks on the drug industry, its marketing and
pricing. Critics say the commercials encourage use of expensive
medicines, when less-costly generics may suffice.
Indianapolis-based Lilly said in a statement that it has already
taken steps in its TV ads and website to share more pricing
information. It said focusing on the list price "creates confusion
because it's not the price most patients will pay."
Merck, which is based in Kenilworth, N.J., said in a statement
that the new requirements may cause patients not to seek treatment
because of a perception they can't afford treatments.
(END) Dow Jones Newswires
June 15, 2019 02:47 ET (06:47 GMT)
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