Merck, Lilly and Amgen win again in lawsuit over drug prices in TV ads. Will it stick?

court decision
In the Trump administration versus pharma and the Association of National Advertisers over drug prices in TV ads, the government lost again on appeal Tuesday. (Getty Images)

The Trump administration's quest for drug prices in TV ads just took another hit—and it might be a fatal blow. A U.S. appeals court agreed with a lower court ruling that found the U.S. Department of Health and Human Services (HHS) didn't have the authority to require them.

It was a big win for Merck & Co., Eli Lilly and Amgen along with the Association of National Advertisers (ANA), which sued last June to block the rule that would have forced drugmakers to include list prices in TV ads.

Their argument? HHS has no statutory authority to create the rule in the first place, and even if it did, the rule violates the First Amendment.

U.S. District Court Judge Amit Mehta agreed that HHS lacked the authority and, in a strongly worded opinion said, “No matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized.”

If a couple of lawmakers have their way, Congress will do just that. But in the meantime, the Court of Appeals for the District of Columbia upheld (PDF) the ruling and reinforced the drugmakers' argument that including the list price—which most consumers don't pay—would not only confuse patients but potentially discourage them from seeking treatment.

REGULATED: Merck, Lilly and Amgen square off in appeals court over drug pricing in TV ads

The law simply doesn't give HHS the power to force public disclosure "of pricing information that bears at best a tenuous, confusing, and potentially harmful relationship to the Medicare and Medicaid programs," the three-judge panel's ruling concluded. "Although the Secretary’s regulatory authority is broad, it does not allow him to move the goalposts to wherever he kicks the ball.”

So what's next? HHS does have option to appeal the ruling to the U.S. Supreme Court.

But Dan Jaffe, head of ANA government relations, said he'd be "very surprised" if the high court agreed to review the case, because both courts' decisions were worded so strongly.

"The ball is in their court now. I'm hopeful that, at least for now, they realize this is not worth pursuing," Jaffe said.

While HHS hasn’t yet said what it will do, the White House did blast the district court's decision last year to dismiss the regulation. A White House spokesman at the time accused “an Obama-appointed judge” of siding with Big Pharma “to keep high drug prices secret.”

RELATED: 'Agency overreach, plain and simple': Drugmakers hit back at HHS as drug prices in TV ads get another hearing

A more likely path for the drug price requirement is through Congress. U.S. senators Richard Durbin, an Illinois Democrat, and Charles Grassley, a Republican of Iowa, have hawked versions of the idea for years. They issued a joint statement Wednesday citing disappointment in the ruling and renewed their commitment to pass a bill forcing prices into ads.

“Even in the midst of a pandemic that threatens all of us, Big Pharma fought for months in court to prevent patients from knowing the price of their drug. Look no further than this lawsuit to understand what matters most to the pharmaceutical industry,” they wrote, adding they plan "to continue to advance our bipartisan legislation to get American patients the information they deserve to hear about drug prices.”

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