Court Blocks Drug Ad Pricing Requirement

A rule from the Trump administration that sought to require prescription drug manufacturers to include pricing information in their television advertisements has been blocked by a federal court. The rule was supposed to go into effect on July 9.

In the decision, the court ruled that only Congress, not the Department of Health and Human Services, has the power to make drug manufacturers disclose drug prices in television commercials. The judge noted that the proposed requirement was impermissible even if it would potentially be effective.

The rule would have required that advertisements for most drugs covered by Medicare or Medicaid that have a list price of more than $35 per month reveal that list price. In some ways, the list price for a drug is like the Manufacturer’s Suggested Retail Price, or MSRP, from car ads. Just as with cars, some consumers do pay the list price. If they are uninsured, for example, they may have no choice but to pay the list price. Or if they have a high deductible, they may be paying the list price until their coverage kicks in.

Critics of the proposal pointed out that list price is not a good indication of what a consumer’s out-of-pocket cost would be, that the requirement had no enforcement mechanism, and that it did not directly address the larger problem of high and rising drug prices.

At Medicare Rights, we urge the Trump administration and Congress to tackle head on the underlying problem of high drug prices and the massive out-of-pocket costs people with Medicare and their families are forced to pay for needed medications. Transparency in drug pricing is important but not enough to truly fix the problem. We will continue to push for drug pricing reforms and for coverage changes that will help people better afford their health care and prescription drugs.

Read more about the court’s decision.

Read more about the drug ad pricing rule.