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A rule from the United States executive branch that would have required drug manufacturers to show the list price of prescription drugs on television ads was struck down by a judge this week.
The regulation had been scheduled to take effect this past Tuesday, and was intended to help combat rising drug prices by requiring more transparency from pharmaceutical companies.
When the rule was announced in May, it was regarded as a small but meaningful step aimed at curbing the continued rise of drug prices in America.
Pushed to enactment by the Department of Health and Human Services (HHS), with support from the White House, the rule would have required pharmaceutical manufacturers to disclose in television ads the retail price of a 30-day supply of any drug that is covered through Medicare and Medicaid and costs at least $35 a month.
The move received immediate pushback from drug companies, culminating in a lawsuit filed jointly by the Association of National Advertisers (ANA) and pharmaceutical manufacturers Amgen, Merck, and Eli Lilly, claiming the HHS was not authorized to enact such a rule without congressional approval.
The lawsuit also argued the rule would violate First Amendment rights by compelling speech.
Judge Amit Mehta, of the U.S. District Court for the District of Columbia, agreed with the ANA and drug companies, stating: “[N]either the act’s text, structure, nor context evince an intent by Congress to empower HHS to issue a rule that compels drug manufacturers to disclose list prices.”
While Mehta did not question the rule’s intent, he believed the HHS was overstepping its authority in issuing such a requirement.
Mehta wrote, “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.”
The Trump administration is expected to appeal the decision.
