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19 June 2019Americas

Pharma companies join forces to block list price disclosure

Pharmaceutical companies Merck & Co, Eli Lilly, and Amgen are suing the US Department of Health and Human Services (HSS) over proposed rules which would force companies to disclose the list prices of drugs in TV advertisements.

The suit, filed alongside the Association of National Advertisers in the US District Court for the District of Columbia on Friday, June 14, claimed that the rules violate the First Amendment of the US Constitution.

The HSS first mooted the new rules last year, which would require drug advertisements on TV to list the wholesale acquisition cost if that price amounts to $35 or more a month for a full month’s supply or the usual course of therapy.

As it stands, the rules are due to take effect on July 9.

The new measures would require companies to list the prices charged to wholesalers, rather than patients, the lawsuit said. According to the coalition of pharmaceutical companies and advertisers, this would effectively force manufacturers to “to mislead tens of millions of Americans about the price they would actually pay for important medicines”.

The plaintiffs argue that this would have a detrimental effect on patient care. Displaying the list price of a drug on TV advertisements, the companies said, would cause “many patients to overestimate how much they would have to pay for treatment, and indeed to cause many patients to conclude—incorrectly—that it is not worth asking their doctors about the advertised product”.

In addition to these arguments, however, the plaintiffs also claim that the rule is unconstitutional. In order to compel commercial actors to convey a particular message in advertising, the complaint argued, the government must demonstrate that the move would advance a substantial government interest.

According to the plaintiffs, however, the HHS has “no legitimate interest, much less a substantial one,” in forcing companies to convey a message which they say would be misleading to consumers.

In addition to its First Amendment argument, the lawsuit argued that the HHS has no legal authority to impose the rules.

According to the complaint, the HHS is relying on provisions in the Social Security Act which give government agencies the authority to adopt regulations necessary for the administration of the Medicare and Medicaid programs.

“But if Congress had truly intended to give HHS authority to regulate anything and everything that indirectly affects the healthcare market … it would have said so directly,” the lawsuit said.

In a statement, Amgen said that in addition to the alleged freedom of speech violations, the rule “mandates an approach that fails to account for differences among insurance, treatments, and patients themselves, by requiring disclosure of list price”.

In an order issued on Monday, June 17, the court indicated that it aims to hand down a decision in the case by July 8, the day before the rule is due to come into effect.

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