Administrative Law

Federal judge blocks HHS rule requiring drugmakers to disclose prices in TV ads

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A federal judge in Washington, D.C., has vacated an agency rule that required drugmakers to disclose the list price of prescriptions in TV advertising.

U.S. District Judge Amit Mehta ruled Monday that the U.S. Department of Health and Human Services did not have the statutory authority to adopt the rule. The New York Times, Law 360, the Wall Street Journal, the Washington Post and NPR have coverage.

The HHS had claimed authority under the Social Security Act to enact a rule that would help reduce wasteful and abusive increases in drug prices in Medicare and Medicaid. The rule required disclosure of drugs that cost more than $35 per month.

Mehta rejected the argument. “Neither the act’s text, structure, nor context evince an intent by Congress to empower HHS to issue a rule that compels drug manufacturers to disclose list prices,” he wrote.

Mehta said he wasn’t questioning the agency’s motives in adopting the rule, which could well be effective in halting the rising price 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 wrote. “The responsibility rests with Congress to act in the first instance.”

Mehta didn’t reach challengers’ argument that the disclosure rule was compelled speech that violated the First Amendment.

Bipartisan legislation that was similar to the HHS rule passed the Senate last August. The sponsors said in May they were still pursuing the bill, according to the New York Times.

The rule had been set to take effect Tuesday. The drug companies challenging the rule were Merck & Co., Eli Lilly and Co. and Amgen Inc. The case is Merck v. U.S. Department of Health and Human Services.

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