ANA Sues Over Drug Price Disclosure Mandate

The Association of National Advertisers has joined with three pharmaceutical companies in a challenge to a new federal rule requiring that television ads for prescription drugs include their list price.

In a complaint filed Friday against the Department of Health and Human Services, the ANA and pharmaceutical companies argue that the rule will mislead consumers, because the list price is often higher than the out-of-pocket price that a “substantial majority” of people would pay.

“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 ANA, Merck, Eli Lilly and Amgen say in papers filed with the U.S. District Court in Washington, D.C.

The new rule applies to “television” ads, including ads that appear on streaming video.

“It was important to take a stand because regulators at all levels are adopting regulations that use advertisers to convey governmental messages or to serve political or social ends,” Dan Jaffe, ANA executive vice president for government relations, said in a blog post.

The ANA and other groups are seeking a declaratory judgment invalidating the requirement. “The rule exceeds HHS’s statutory authority, violates the First Amendment, and should therefore be set aside,” the ANA and pharmaceutical companies write.

They argue that the “list price” doesn't take into account discounts, manufacturer rebates or costs covered by insurance.

“For most patients and most prescriptions, private insurance or a government health program pays a significant majority of the cost of a pharmaceutical product,” the lawsuit alleges. “The patient, meanwhile, typically makes only a comparatively small out-of-pocket payment.”

The ANA and others argue that Congress never granted the Health and Human Services agency the type of “expansive authority” that would enable it to order ad disclosures. The challengers also say the violates the First Amendment by compelling speech -- in this case, mandating price disclosures.

“HHS transparently expects that it will be easier to inflame public opinion about the affordability of pharmaceutical products if people believe those products would cost them many times more than they actually would,” the lawsuit alleges. “HHS has no legitimate interest, much less a substantial interest, in misleading patients in this way.”

The ANA has previously opposed some governmental efforts to mandate disclosures. In 2017, the group weighed in as a friend-of-the-court in a lawsuit brought by CTIA -- The Wireless Association against Berkeley over that city's ordinance requiring cell phone retailers to post radiation warnings.

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