Merck & Co., Eli Lilly, Amgen and the Association of National Advertisers (ANA) hit back at the Trump administration in a court filing Thursday, calling its continued push to mandate drug prices in TV ads "agency overreach, plain and simple."
It was the latest salvo in a legal battle over a Department of Health and Human Services (HHS) rule requiring drugmakers to put list prices in their TV commercials. The drugmaker and advertising association sued to block the rule and won in July, but HHS appealed that ruling in August.
Now, with the latest filing in hand, the U.S. Court of Appeals in D.C. will hear arguments from both sides Jan. 13. If the appellate court upholds the lower court decision, HHS could appeal to the U.S. Supreme Court.
The initial decision by the D.C. District Court in July blocked the drug price mandate from going into effect because the court determined HHS does not have the statutory authority to adopt the rule.
ANA and the pharma companies echoed that in yesterday’s filing. Noting the HHS’ lack of authority, the plaintiffs said, “This is agency overreach, plain and simple.”
The co-plaintiffs also reminded the Court of Appeals that they believe the rule would violate First Amendment protections for commercial speech.
The wholesale acquisition cost (WAC) that would be placed in TV ads is rarely the price paid by consumers; the real out-of-pocket cost varies widely from patient to patient depending on insurance coverage. That fact makes the price information misleading, the plaintiffs argue. Previous court rulings have said government-mandated disclosures must be “factual and uncontroversial.”
“For the overwhelming majority of prescription medications, the patient’s out-of-pocket cost is well below WAC—and often has no relationship to WAC whatsoever," the new filing states.
"For these reasons," it goes on to say, "displaying a drug’s WAC in consumer advertisements tells most consumers little or nothing about what they will actually pay for the drug—let alone whether that cost will be higher or lower than available alternatives."
Although the First Amendment point wasn’t adjudicated at the district court—the lack of authority was enough to strike it down, that court determined—ANA believes it is a second strong argument to lean on if needed.
HHS has not revealed which arguments it will pursue.
Dan Jaffe, who heads regulatory affairs for ANA, said in a statement that “the last thing the public needs is for the government to require that information be forced to be carried in DTC prescription drug advertising that is highly misleading. This type of inaccurate disclosure could also undermine the public’s faith in the accuracy of the other information in DTC ads.”