Drug Price in Advertising Rule Stopped

Julius Hobson

A federal judge stopped President Trump’s drug price television ad requirement.

U.S. District Judge Amit Mehta said that drug makers will not have to reveal their prices in television ads.

HHS Secretary Alex Azar announced the final rule from CMS in May, which requires direct-to-consumer television advertisements for prescription drugs covered by Medicare or Medicaid to include the Wholesale Acquisition Cost-if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy, according toFormularyWatch.

“It was always my opinion that HHS/CMS did not have the authority to require drug companies to post prices in their direct-to-consumer advertisements,” says Julius Hobson, Jr., senior policy advisor, at Polsinelli, a firm with offices in Washington, D.C.

Related article: New Drug Pricing Act Could Change Drug Pricing

“Judge Mehta’s opinion rightly points out there is no express authorization in federal statues providing the HHS the authority to require price disclosure in ads,” Hobson says. “Further, as the judge also points out, the drug companies are not direct participants in Medicare and Medicaid programs. An attempt to force price transparency was a stretch. Down the road, this opinion, if upheld on appeal, will place more pressure on Congress to enact legislation to require some type of drug pricing transparency.”

James Mather, senior pharma analyst at GlobalData, a data and analytics company, expressed concerns about the new policy back in May.

A drug’s list price does not translate directly into the ‘true’ price of a drug, Mather said in a GlobalData release. “Drug makers often bundle their brands together when negotiating, meaning the individual drug list prices can be almost meaningless in these cases,” he said.