Major Drug Companies Sue Over Trump Administration Rule Requiring Prices In TV Ads

Three major pharmaceutical companies sued the Trump administration in federal court Friday over the administration’s rule requiring the companies to disclose drug prices in television ads.

Merck, Eli Lilly and Amgen plus an advertising trade association say the rule, which is set to go into effect this summer, could encroach on free speech, reported Bloomberg.

“Not only does the rule raise serious freedom of speech concerns, it mandates an approach that fails to account for differences among insurance, treatments, and patients themselves, by requiring disclosure of list price,” Amgen said in a statement according to Bloomberg.

The drug companies could get their way if courts are swayed by a similar free speech argument that killed an FDA proposal mandating graphic warnings on cigarette cartons in 2012. The court wanted the FDA to prove the graphic warnings would result in lower smoking rates, reported STAT News.

News of the suit comes just after President Donald Trump touted how his administration is working with “Big Pharma” to reduce drug prices during a speech at the White House Rose Garden announcing an expansion of health reimbursement arrangements designed to help small businesses.

The administration finalized the television ad rule in May.

“Requiring the inclusion of drugs’ list prices in TV ads is the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the healthcare they receive,” Health and Human Services Secretary Alex Azar said in a statement.

The rule applies to all drugs that cost more than $35 for a month supply and has support from lawmakers on both sides of the aisle, including Republican Iowa Sen. Chuck Grassley and Democratic Illinois Sen. Dick Durbin.

Drug companies tried to placate HHS by including a weblink in their television ads directing consumers to detailed pricing information.

Skeptics of the proposed Trump administration rule point out that a “list price” can be a very confusing term for consumers. Since most consumers have insurance, their plan and provider could mean they pay a very different price than the one listed.

“Simply disclosing a drug’s list price in advertisements can be misleading because list prices don’t reflect patients’ out-of-pocket costs, which vary from plan to plan,” Lindsay Bealor Greenleaf, Director of Policy at ADVI Health, told The Daily Caller News Foundation in a statement Friday.

“Additionally, list prices are misleading because they don’t reflect what the manufacturer makes on a drug and don’t account for rebates and negotiated discounts demanded by pharmacy benefits managers and other players in the supply chain, which totaled $166 billion in 2018,” Bealor Greenleaf continued.