Major drugmakers in the United States have filed a lawsuit to block a rule requiring them to disclose drug prices in television advertisements. The lawsuit was jointly filed by Merck, Amgen, Eli Lilly and the Association of National Advertisers.
Drug companies are fighting the regulation, claiming that list prices do not reflect the final price paid by patients. The list price excludes discounts and rebates that drugmakers offer.
List prices only affect a small percentage of consumers, particularly those with no insurance and people with drug co-payments based on a percentage of the cost. Drugmakers argue that disclosing the high list prices will scare off consumers and mislead those with insurance coverage.
The Department of Health and Human Services (HHS) finalized the regulation on May 8 and will take effect in July. It’s part of the government’s efforts to lower the cost of drugs for Americans.
The plaintiffs in the case allege that HHS has overstepped its authority and raised concerns over free speech. The lawsuit could hinder the Trump administration’s efforts to lower drug prices through regulation.
“If the drug companies are embarrassed by their prices or afraid that the prices will scare patients away, they should lower them,” said HHS spokeswoman Caitlin Oakely. “President Trump and Secretary Azar are committed to providing patients the information they need to make their own informed health care decisions.”
Azar has said that including drug list prices in television advertisements is the most significant step “any administration has taken” toward helping Americans understand the cost of the health care they receive.
The new rule does not have an enforcement mechanism, but failing to include the price in advertisements could constitute as a deceptive trade practice and may leave the company open to lawsuits.
The U.S. has some of the highest prescription drug costs in the world, but curbing rising prices has proven the be a challenge. Under current regulations, pharmaceutical companies have a monopoly on certain drugs, and they have flexibility when it comes to pricing their drugs. As a result, the costs of medication in the U.S. has skyrocketed.
The law requiring drug prices to be listed on TV advertisements is just one piece of the puzzle aimed at lower the cost of medication in the U.S.
Speaker Nancy Pelosi has proposed a bill, which is not yet finalized, that would allow the Health and Human Services Secretary to negotiate prescription drug prices covered by Medicare. The final price, however, would be decided by the Government Accountability Office if no initial agreement could be reached.
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