Appeals Court Eyes Feds' TV Drug Ad Price Disclosure Mandate

D.C. Circuit Judge Harry Edwards (Photo: Diego M. Radzinschi/ ALM)

A federal appeals court appeared poised Monday to rule against a Trump administration rule requiring that drug manufacturers include the price of prescription drugs in television ads.

A three-judge panel for the U.S. Court of Appeals for the D.C. Circuit, appointed by presidents from both parties, heavily questioned U.S. Department of Justice attorney Ethan Davis on how the requirement is tied to the U.S. Department of Health and Human Services’ administration of Medicaid and Medicare.

(Related: CMS to Drug Makers: Put Your Prices in TV Drug Ads)

Davis said imposing the requirement on manufacturers who participate in the health care programs will lead to more transparency around drug prices, and can lead to conversations between patients and doctors about what other prescriptions are available at a lower cost.

But the judges weren’t buying the argument that the Trump administration has the power to enact the measure.

“I don’t understand the connection between this rule and effective administration” of the health care programs, Senior Judge Harry Edwards, appointed by President Jimmy Carter, told Davis.

When Davis said that more transparency about drug prices could lead to a drop in those prices, Edwards replied, “How do we know that?”

And he asked if there was a specific portion of the rule about it leading to lower drug costs. Davis said there was not and repeatedly referenced economic principles that more transparency around prices can lead to reductions in those prices.

Davis argued that showing the wholesale price of a prescription drug can provide an “anchor” for consumers, even if reductions Americans receive through their health care coverage means they won’t necessarily pay that price.

However, the judges sounded skeptical.