Drug Price Disclosure Rule Vacated

A new federal regulation that would have required companies to disclose wholesale prices of prescription drugs in television advertisements was rejected by a federal court on July 8, one day before the rule would have taken effect. Amgen Inc., Eli Lilly & Co. and Merck & Co. Inc. had filed suit challenging the rule, claiming that the mandated disclosures would mislead consumers and violate the companies’ free-speech rights.

The opinion by Judge Amit P. Mehta of the U.S. District Court for the District of Columbia held that the rule exceeded the legal authority of the U.S. Department of Health and Human Services (HHS). “This case is not just about whether HHS can force drug companies to disclose their list prices in the name of lowering costs,” the opinion stated. “Rather, the [Wholesale Acquisition Cost] Disclosure Rule represents a significant shift in HHS’s ability to regulate the health care marketplace. Congress surely did not envision such an expansion of regulatory authority when it granted HHS the power to issue regulations necessary to carry out the ‘efficient administration’ of the Medicare and Medicaid programs.”

The now-invalidated rule was most recently discussed here.