Two powerful lobbies, the National Association of Broadcasters and the Pharmaceutical Research and Manufacturers of America, contend that the disclosure requirement would be a form of “compelled speech” in violation of the First Amendment. Their comments on the proposed rule provide a road map for possible lawsuits challenging the mandate.
The required disclosure of list prices has no rational connection to the government’s stated goal of reducing drug prices paid by Medicare and Medicaid beneficiaries, said Rick Kaplan, an executive vice president of the broadcasters association.
James C. Stansel, the top lawyer at the drug makers lobby known as PhRMA, said there were “other, much less intrusive ways to make cost information available to patients.” For example, he said, Congress could authorize the Medicare agency to disclose list-price data itself, along with cost-sharing information for beneficiaries, on a government-sponsored website.
When the White House issued a “blueprint to lower drug prices” with several dozen ideas last year, it directed the Food and Drug Administration to consider requiring drug makers to include list prices in advertising. The agency has clear legal authority to regulate drug ads, but it is not issuing the new rule. Rather, it was drafted by the Centers for Medicare and Medicaid Services.
The Trump administration says this is justified because the agency that runs Medicare and Medicaid is “the single largest drug payer in the nation.”
But its authority is sure to be challenged. Federal law “delegates regulatory power over prescription drug advertising to F.D.A., not C.M.S.,” Mr. Stansel said. Both agencies are part of the Health and Human Services Department.
The drug industry is poised to roll out an alternative to Mr. Trump’s plan. PhRMA companies say they will voluntarily include information in TV ads directing viewers to company websites that provide data on list prices, typical out-of-pocket costs and sources of financial assistance for patients who need it. With many drugs now costing more than $50,000 a year, many people do need assistance.