Court strikes down Trump rule that drugmakers disclose price
WASHINGTON (AP) — In a major legal setback for President Donald Trump on a high-profile consumer issue, a federal appeals court has ruled that his administration lacks the legal authority to force drug companies to disclose prices in their TV ads.
The ruling denies Trump an easy-to-understand win on a major reelection priority for the White House, bringing down the cost of prescription medicines. Where most plans to overhaul the cost of drugs are complex, mandating that companies disclose prices is something any consumer can relate to.
Separate
from the court case, legislation that would lower drug costs for
Medicare beneficiaries with high bills is stuck in Congress. It’s
unclear that Trump can get it moving, since it would require some hard
compromises for both Republicans and Democrats. There’s also a separate
bill that would mandate drug companies to disclose their prices in
consumer advertising.
Trump, however, is not empty-handed. His
administration recently brokered an agreement with drug companies and
insurers that would give Medicare recipients taking insulin the ability
to limit their copays to $35 a month, starting next year.
On TV
ads, the unanimous decision by a panel of the U.S. Court of Appeals for
the District of Columbia Circuit did not address a core argument of the
pharmaceutical industry, that forcing companies to disclose their prices
in advertising violates their free speech rights. Instead the
three-judge panel ruled that the Department of Health and Human Services
overstepped its legal authority by requiring disclosure under the
umbrella of its stewardship of Medicare and Medicaid. The panel issued
its decision Tuesday.
In a scathing rebuke to the administration,
Judge Patricia Millett wrote for the court that HHS “acted unreasonably”
in asserting it had authority to impose “a sweeping disclosure
requirement that is largely untethered to the actual administration of
the Medicare or Medicaid programs.
“Because there is no reasoned
statutory basis for its far-flung reach and misaligned obligations, the
disclosure rule is invalid and is hereby set aside,” the judge added.
White
House spokesman Judd Deere shot back in a statement: “It makes
absolutely no sense to keep patients in the dark on the true cost of
care, and only the ‘D.C. Swamp’ would support such a thing. While big
pharma will do everything they can to avoid even a conversation on their
astronomical list prices, President Trump remains committed to making
pricing information available prior to the delivery of care.”
When the disclosure rule was announced last year, administration officials were confident that it would be in effect by now.
Trump tweeted at the time that “Historic transparency for American patients is here.”
Drug pricing details were expected to appear in text toward the end of commercials, when potential side effects are disclosed.
The
government hoped that patients armed with prices would start discussing
affordability with their doctors, and gradually that would pressure
drugmakers to keep costs of brand-name drugs in check. AARP was among
the organizations supporting disclosure.
The idea was part of a multilevel blueprint Trump announced in 2018 to try to lower prescription drug costs.
In
Congress, a bipartisan bill from Sens. Dick Durbin, D-Ill., and Chuck
Grassley, R-Iowa, would achieve essentially the same results as the
Trump administration rule, requiring companies to list prices of their
prescription drugs in their consumer advertising. Although an act of
Congress would may carry more weight in the courts, its path forward
also seems unclear.
Democrats see an opportunity to make far
bigger changes. The House passed Speaker Nancy Pelosi’s bill authorizing
Medicare to negotiate prices directly with the industry. That’s a
nonstarter for Republicans, though Trump once supported it.
Pelosi’s
bill would plow billions from prescription price cuts into providing
new benefits for Medicare recipients, such as vision, dental and hearing
aids. Democratic presidential candidate Joe Biden also backs Medicare
negotiations.