BioPharma, Legal, Policy

Drugmakers sue to stop rule requiring list prices in consumer advertising

Amgen, Eli Lilly and Merck - plus the Association of National Advertisers - said in a complaint filed Friday that the law would mislead consumers, overstep the government's authority and violate the First Amendment.

The Trump administration’s decision to require drugmakers to include list prices in their direct-to-consumer television advertisements had already drawn significant opposition from the industry when it was proposed. Now, several manufacturers are suing to stop it.

In a lawsuit filed Friday in the U.S. District Court for the District of Columbia against the Department of Health and Human Services, three drugmakers and the Association of National Advertisers argued that the requirement – officially implemented last month – would lead to confusion and sticker shock among consumers, without fully informing them of the actual costs of drugs. The ANA and the drugmakers – Merck & Co., Eli Lilly & Co. and Amgen – allege that the rule would exceed HHS’ authority and violate the First Amendment.

The list price that drugmakers would have to include “is often multiple times higher than the out-of-pocket price that a substantial majority of Americans would pay for the advertised products,” the lawsuit read. “Far from promoting transparency and improved decision-making, therefore, the rule would instead force pharmaceutical companies to mislead tens of millions of Americans about the price they would actually pay for important medicines that might improve their health or even save their lives.”

The problem with requiring the list prices, the plaintiffs say, is that it overlooks the various nuances involved in drug prices such as discounts and rebates and the insurance coverage that patients have.

An emailed statement from Lilly noted that the company agrees with the administration that patients need more and better information to understand what they can expect to pay for medicines and has taken steps to improve transparency around pricing. “The impetus for the lawsuit is drug prices in TV ads, but the crux of it is HHS not having the authority to mandate this action,” the statement read. “Not only does the Rule exceed the Department’s statutory authority and raise freedom of speech concerns, the focus on a medicine’s list price creates confusion because it’s not the price most patients will pay.”

Requiring list prices in drug ads was part of a “blueprint” for lowering drug costs that the administration released last year, but the proposal had already drawn opposition from the industry. In February, Johnson & Johnson became the first company to say it would include the list price of a drug, when an executive wrote in a post on the company’s website that it would include cost information on the anticoagulant drug Xarelto (rivaroxaban) later this year. Still, while requiring list prices is politically popular, experts have agreed with the drugmakers’ contention that it is more likely to invite confusion and sticker shock among consumers that could lead to their not taking drugs.

Photo: Chris Ryan, Getty Images

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