On Tuesday June 16th, the U.S. Court of Appeals for the District of Columbia Circuit upheld a District Court decision that invalidated a Department of Health and Human Services (“HHS”) rule requiring pharmaceutical companies to include the wholesale prices of their drugs in direct to consumer TV advertising. See Regulation to Require Drug Pricing Transparency, 84 Fed. Reg. 20732 (May 10, 2019) (the “Disclosure Rule”). Ruling in favor of Merck & Co., Inc., Eli Lilly and Company and Amgen, Inc., the Appeals Court held that HHS lacked statutory authority to establish the Disclosure Rule.
The Court found that HHS “acted unreasonably in construing its authority to include the imposition of a sweeping disclosure requirement that is largely untethered to the actual administration of the Medicare or Medicaid programs. Because there is no reasoned statutory basis for its far-flung reach and misaligned obligations, the disclosure rule is invalid and is hereby set aside.”
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