Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HIMSS 2023
  • Opinion
    • Breaking Bias
    • Commentaries
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - AI and Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Legal
June 14, 2019 02:58 PM

Manufacturers sue Trump administration over price disclosure

Susannah Luthi
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Getty Images/Tetra images RF

    Three drug companies sued the Trump administration over its mandate that they start disclosing their list prices in their ads.

    The lawsuit, filed Friday in U.S. District Court in the District of Columbia, picks a fight with the top health officials even as the pharmaceutical industry is actively campaigning for the administration's proposed ban on rebates for pharmacy benefit managers in Medicare Part D.

    Merck & Co., Eli Lilly and Co. and Amgen sued along with the Association of National Advertisers, claiming that HHS lacked the statutory authority to issue the regulation. Even if the agency could establish the rule, the drugmakers claim it would violate the First Amendment's freedom of speech protections.

    "To the extent additional sources of information would be helpful to patients, HHS has numerous alternatives that would be less restrictive of manufacturers' First Amendment rights (and less misleading to patients)," the companies said.

    Major pharmaceutical trade associations did not join the lawsuit.

    The companies lead their complaint by saying the list price doesn't represent what patients usually pay at the counter.

    "That 'list price' is not, as patients will likely infer from the context, a suggested sales price for the retail transactions contemplated in advertisements," the brief stated. "Rather, the rule requires manufacturers to use the gross price at which a prescription drug is offered to wholesalers, before rebates, discounts, or any other adjustments are applied. And the mandated price figure not only ignores such wholesale price adjustments, but also fails to account for the insurance coverage that a significant majority of Americans have for their retail purchases of prescription drugs."

    The companies went on to say the actual list price required by the rule "is often multiple times higher than the out-of-pocket cost" than is usually seen at point of sale.

    They contended that disclosing the list price will "mislead" patients and that HHS is "actually counting on that misleading effect."

    "It posits that by forcing pharmaceutical manufacturers to advertise to patients 'list prices' that are many times higher than what most patients will actually pay, the (disclosure rule) will expos(e) overly costly drugs to public scrutiny," the brief stated. "And more than that, HHS believes that '(t)his could discourage patients from using beneficial medications,' which might reduce Medicare and Medicaid expenditures on pharmaceutical products but would be directly contrary to those patients' best interests."

    The plaintiffs also defended direct-to-consumer advertisements as a way to educate the public about the kinds of treatments available.

    "Such advertising alerts people who suffer from a given condition about new or existing treatment options of which they may not be aware," the complaint said. "And even apart from awareness of a specific treatment, direct-to-consumer advertising can raise awareness about the health condition itself and prompt action, whether that be a conversation with a doctor or a positive lifestyle change."

    The lawsuit echoes the pharmaceutical industry's core contentions in the ongoing drug-pricing debate. Drugmakers have blamed players in the drug supply chain for their role in point-of-sale prices ever since the Trump administration unveiled its strategy in May 2018.

    Meanwhile, the pharmaceutical industry is ramping up pressure on the administration over the Part D rebate rule, which the CMS has yet to release.

    Rep. Mark Meadows (R-N.C.), who chairs the conservative House Freedom Caucus, and other lawmakers are circulating a letter to HHS Secretary Alex Azar for signatures. The lawmakers argue the proposed rule "will do more to lower list prices and patients' out-of-pocket expenses than any other policy currently under consideration."

    "Many patients are struggling with their out-of-pocket expenses which have escalated, in part, because Part D plans do not use the rebates and discounts they receive from manufacturers to lower beneficiary costs at the point-of-sale," the Meadows letter said. "As such, patients are paying cost-sharing based on artificially inflated list prices when they fill their prescriptions and do not feel the direct impact of the substantial price concessions provided by manufacturers to their Part D Medicare plans."

    Insurers and PBMs are running an equally intense campaign against that proposed rule, arguing that pharmaceutical manufacturers want the rebate rule in place to evade finger-pointing for their high prices.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    legal money settlement.png
    Lab testing scheme results in $372 million judgment
    legal columns gavel money
    How health systems are battling price-gouging allegations
    Most Popular
    1
    Centene to lay off 2,000 workers
    2
    How health systems are battling price-gouging allegations
    3
    Senate advances bill to temporarily aid hospitals, health centers
    4
    Elevance, Blue Cross Louisiana halt $2.5B proposed deal
    5
    Tower Health to sell urgent care centers, close others
    Sponsored Content
    Daily Dose Newsletter: Sign up to receive a late afternoon weekday roundup of that day’s breaking news and developments in healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing