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Judge Rules Against Trump Proposal Forcing Pharma Companies To Disclose Drug Prices In Commercials

Judge Rules Against Trump Proposal Forcing Pharma Companies To Disclose Drug Prices In Commercials

A U.S. federal judge ruled against a proposal that pharmaceutical companies need to disclose wholesale prices for their products in T.V. advertising, Reuters reported.

What Happened

The U.S. Department of Health and Human Services Secretary Alex Azar disclosed a new rule in early May which would have forced pharmaceutical companies to advertise prices when advertising to consumers on TV, Reuters wrote. The logic behind the move would be to compel drugmakers to lower prices to avoid a potential consumer backlash if the general population is aware of their drug prices.

The rule was supposed to come into effect on Tuesday but the U.S. District Judge Amit Mehta declared it to be illegal on Monday. The argument against the rule was the federal government agency doesn't have the necessary authority from the U.S. Congress to force companies to disclose prices.

"But no matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized," Mehta's ruling read.

Why It's Important

Major pharma companies including Merck & Co., Inc. (NYSE: MRK), Eli Lilly And Co (NYSE: LLY), and Amgen, Inc. (NASDAQ: AMGN) filed lawsuits against the proposed rule. The companies argued the new rule would confuse consumers as the wholesale list price is irrelevant to patience with insurance.

A White House spokesman Judd Deere said in a statement obtained by Reuters the ruling is "outrageous," especially from an "Obama appointed judge." The statement added the ruling sides with big pharma and the leaves "patients and families as the real victims."

The Trump administration suffered a setback with the ruling and it is unclear what steps will be taken next to deliver on his pledges to help lower drug costs.

Related Links

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