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 U.S. District Judge Amit Mehta in Washington sided with drugmakers
Merck & Co Inc, Eli Lilly and Co and Amgen Inc by halting the U.S.
Department of Health and Human Services (HHS) rule from taking
effect on Tuesday as planned.
Mehta in his ruling set aside the entire rule as invalid, saying the
HHS lacked authority from the U.S. Congress to compel drug
manufacturers to disclose list prices.
"It is outrageous that an Obama appointed judge sided with big PhRMA
to keep high drug prices secret from the American people, leaving
patients and families as the real victims," White House spokesman
Judd Deere said in a statement, referring to President Donald
Trump's Democratic predecessor, Barack Obama.
PhRMA, the Pharmaceutical Research and Manufacturers of America, is
the largest industry lobbying group.
HHS Secretary Alex Azar announced the rule on May 8, saying that
forcing drugmakers to disclose their prices in direct-to-consumer TV
advertising could help drive down skyrocketing prescription drug
costs if the companies were embarrassed by them or afraid they would
scare away customers.
The rule was originally suggested in May 2018 as part of Trump's
"blueprint" to lower prescription drug costs for U.S. consumers.
The judge said such disclosures could well be an effective tool in
halting the rising cost of prescription drugs. "But no matter how
vexing the problem of spiraling drug costs may be, HHS cannot do
more than what Congress has authorized," Mehta concluded.
Under the rule, the wholesale, or list, price would be included if
it was $35 or more for a month's supply or the usual course of
therapy. HHS said the 10 most commonly advertised drugs had list
prices of $488 to $16,938 per month or for a usual course of
therapy.
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Many drugmakers have opposed the rule. PhRMA said the list prices
could be confusing for patients and discourage them from seeking
medical care.
Merck, Eli Lilly and Amgen filed their lawsuit alongside the
Association Of National Advertisers trade group on June 14, arguing
the rule would confuse consumers by forcing them to disclose a price
irrelevant to patients with insurance.
Drugmakers have long argued that list prices do not reflect the
actual cost of drugs as they do not take into account discounts and
rebates negotiated with health insurers and pharmacy benefit
managers to ensure patient access to the medicines.
The lawsuit alleged that HHS lacked authority to issue the rule and
that it violated their free-speech rights under the First Amendment
of the U.S. Constitution.
The U.S. Justice Department defended the rule in court, saying it
met a standard the U.S. Supreme Court set in 1985, when it held the
government could force advertisers to disclose factual,
non-controversial information.
(Reporting by Tina Bellon in New York and Nate Raymond in Boston;
Additional reporting by Roberta Rampton in Washington; Editing by
Bill Berkrot and Peter Cooney)
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