The Trump administration intends to appeal a district court's ruling that vacated a requirement for drugmakers to disclose the list prices of their products in TV commercials aimed at consumers.
The ad requirement, finalized by the U.S. Department of Health and Human Services in May, was set to go into effect July 9.
But hours before that deadline, Judge Amit Mehta of the U.S. District Court for the District of Columbia declared that HHS had exceeded its authority in establishing the rule — a decision that sided with Amgen Inc., Eli Lilly and Co. and Merck & Co. Inc. The three drugmakers were joined in their lawsuit by the Association of National Advertisers.
"No matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized," Mehta wrote in his July 8 ruling. "The responsibility rests with Congress to act in the first instance."
In their lawsuit, filed in June, the three drugmakers said the HHS requirement violated their freedom of speech under the U.S. Constitution. Because the court held that the rule was invalid, it did not reach a decision on the free-speech challenge.
If the HHS rule had taken effect in July, brand-name drugmakers would have been required to include in TV ads the list price for a 30-day supply of any medicine costing over $35 that is covered by Medicare and Medicaid.
HHS Secretary Alex Azar said forcing drugmakers to disclose the wholesale acquisition cost, also known as the manufacturer's list price, in TV ads would shame them into lowering their prices.
In an Aug. 21 court filing, HHS said it planned to appeal the judge's decision to the U.S. Court of Appeals for the District of Columbia Circuit, reigniting the administration's battle with drugmakers.
"President Trump and Secretary Azar are committed to providing patients the information they need to make their own informed healthcare decisions and to lower the high cost of prescription drugs," HHS spokeswoman Caitlin Oakley told S&P Global Market Intelligence in a statement. "It's time for drug companies to level with American patients about the cost of their drugs: If the drug companies are embarrassed by their prices or afraid that the prices will scare patients away, they should lower them."
Amgen, Lilly and Merck did not immediately respond to requests for comment on the court filing.
Other setbacks
Azar was hit with another setback last month in his efforts to lower drug prices — a wound that was inflicted from within the administration — when the White House decided to abandon the secretary's proposal to ban rebates paid by middlemen.
The White House also ran into immediate opposition from the drug industry, a number of Republicans on Capitol Hill and Canadian officials on two pathways the administration outlined for potentially importing drugs from foreign nations where prices are lower.
The president's drug pricing reform czar is also leaving the administration, on Aug. 22.
PhRMA to plead again to stop foreign pricing project
Meanwhile, representatives of the biopharmaceutical industry will make another trip to the White House early next week. They hope to persuade the Trump administration to not pursue an experiment to test an international drug pricing payment index model for expensive injectable medicines covered by Medicare.
Stephen Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America, called the proposal an attempt to impose "foreign price controls from countries with socialist healthcare systems that deny their citizens access and discourage innovation."
The White House Office of Management and Budget has been reviewing the idea since June.
Last week, Centers for Medicare and Medicaid Services Administrator Seema Verma said her agency had been working "fast and furious" with the White House on finalizing the proposal.
Representatives of PhRMA, a lobbying group for the biopharmaceutical industry, plan to meet with OMB on Aug. 26, according to the agency's public calendar.
A spokeswoman for the group declined to provide details about who would attend the meeting but confirmed that the discussion would revolve around PhRMA's concerns with the international pricing model.
A number of Republicans on Capitol Hill, including Sen. Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee, have been skeptical of the idea of testing the international pricing model.
In his departing message in December 2018, the now-retired Sen. Orrin Hatch of Utah, who previously led the Senate Finance Committee, called on his Republican colleagues to oppose Trump's proposal.
The White House declined to comment on the status of a potential "favored nations" executive order. The order would require drugmakers to offer the U.S. government the lowest prices paid by other developed nations for prescription medicines — another idea PhRMA opposes.
