Drug­mak­ers sue HHS for try­ing to add prices to DTC ads

Am­gen, Mer­ck, Eli Lil­ly and the As­so­ci­a­tion of Na­tion­al Ad­ver­tis­ers on Fri­day sued the De­part­ment of Health and Hu­man Ser­vices (HHS) be­cause of a rule­mak­ing that would re­quire phar­ma­ceu­ti­cal list prices to be shown in di­rect-to-con­sumer (DTC) drug ad­ver­tise­ments on tele­vi­sion.

The rule, which was fi­nal­ized in May and is set to take ef­fect in Ju­ly, re­quires that tele­vi­sion ad­ver­tise­ments for pre­scrip­tion drugs or bi­o­log­i­cal prod­ucts with a list price of $35 or more con­tain a state­ment in­di­cat­ing the Whole­sale Ac­qui­si­tion Cost (al­so re­ferred to as WAC or the list price) for a typ­i­cal 30-day reg­i­men or for a typ­i­cal course of treat­ment.

But in their law­suit, file in the US Dis­trict Court for the Dis­trict of Co­lum­bia, the drug­mak­ers took is­sue with the fact that con­sumers do not pay the list prices that would be ad­ver­tised un­der the rule.

“The rule thus di­rects man­u­fac­tur­ers to ad­ver­tise to con­sumers the price that man­u­fac­tur­ers charge to whole­salers, even though these are two en­tire­ly dif­fer­ent con­cepts,” the com­plaint says. “And be­cause third-par­ty pay­ers (like in­sur­ance plans or gov­ern­ment health pro­grams) gen­er­al­ly cov­er the bulk of the costs of a brand­ed drug, the over­whelm­ing ma­jor­i­ty of pa­tients do not pay any­thing re­mote­ly close to the Whole­sale Ac­qui­si­tion Cost of an ad­ver­tised drug at the phar­ma­cy or through their provider.”

For in­stance, rarely does any­one on Med­ic­aid, HHS’ pro­gram to help those with lim­it­ed in­comes or re­sources, pay more than an $8 co-pay, the suit claims.

“Be­yond be­ing en­tire­ly un­nec­es­sary, bad for pa­tients, and detri­men­tal to health care,” the drug­mak­ers al­so claim that the rule is un­law­ful for two rea­sons: HHS lacks the statu­to­ry au­thor­i­ty to im­pose the rule and it vi­o­lates the First Amend­ment.

The gov­ern­ment “bears a heavy bur­den to jus­ti­fy laws com­pelling speech, even in the com­mer­cial are­na,” the suit says, not­ing that HHS has “no le­git­i­mate in­ter­est, much less a sub­stan­tial one, in forc­ing phar­ma­ceu­ti­cal man­u­fac­tur­ers to make state­ments in di­rect-to-con­sumer mes­sag­ing that it con­cedes may mis­lead pa­tients about their out-of-pock­et costs for med­ica­tions.”

As far as HHS’s statu­to­ry au­thor­i­ty, the suit says this “claim to have dis­cov­ered such ex­pan­sive pow­er in a pair of decades-old gen­er­al rule­mak­ing pro­vi­sions of the So­cial Se­cu­ri­ty Act is sim­ply not cred­i­ble.

“Orig­i­nal­ly, HHS in­di­cat­ed that it hoped the FDA—long rec­og­nized as the pri­ma­ry reg­u­la­tor of phar­ma­ceu­ti­cal ad­ver­tis­ing—would adopt a price dis­clo­sure re­quire­ment us­ing au­thor­i­ty del­e­gat­ed by Con­gress in the FD­CA. But af­ter com­menters point­ed out that the FDA has long con­ced­ed the FD­CA does not au­tho­rize price dis­clo­sure man­dates, HHS aban­doned that course,” the suit says.


First pub­lished in Reg­u­la­to­ry Fo­cus™ by the Reg­u­la­to­ry Af­fairs Pro­fes­sion­als So­ci­ety, the largest glob­al or­ga­ni­za­tion of and for those in­volved with the reg­u­la­tion of health­care prod­ucts. Click here for more in­for­ma­tion.

So­cial im­age: Shut­ter­stock

Author

Zachary Brennan

managing editor, RAPS

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