AARP, HHS File Briefs in DTC Case Over Drug Prices

The case over whether drugmakers can be compelled to disclose pharmaceutical prices in direct-to-consumer (DTC) television advertisements continues in the US Court of Appeals for the District of Columbia, with HHS appealing and AARP and the AARP Foundation filing an amicus brief this week in Merck & Co. Inc. et al v US Department of Health and Human Services et al.

Over the summer, US District Court Judge Amit Mehta struck down an HHS rule that was to take effect the next day that would have forced pharmaceutical makers to disclose prices. His order vacated the rule, agreeing with plaintiffs Merck, Eli Lilly, and Amgen, that HHS did not have the statutory authority to implement the measure; HHS claimed it possessed the authority to do so as provided by the Social Security Act.

The rule would have required drug manufacturers to disclose their list prices for pharmaceutical products or biologics in television ads for drugs covered by Medicare or Medicaid if the WAC, or list price, is $35 or more for a month’s supply.

On August 22, HHS challenged the district court ruling with its notice of appeal; then, on September 23, it filed its brief in the matter. According to reports, the administration’s brief says that under federal code, the secretary of HHS “shall prescribe such regulations as may be necessary to carry out the administration of the insurance programs.”

Among other things, HHS claims it has oversight of drugmakers when they agree to join the Medicaid Drug Rebate Program as well as Medicare Coverage Discount Program Agreements.

This week, the AARP and AARP Foundation filed an amicus brief on the side of HHS, urging the court to reverse the earlier ruling and permit the DTC rule to go forward. The organization notes that, through Medicare and Medicaid, the US government is the largest single payer for prescription drugs. Rising prescription drug costs are threatening the sustainability of these programs, both HHS and the AARP argue.

“Improving drug price transparency is a key way to help address escalating costs. Improving transparency shreds the cloak of secrecy around drug prices by revealing valuable information to consumers and other stakeholders so they can seek viable, cost-reducing solutions,” the AARP brief says. “Greater transparency helps make consumers more informed about potential drug costs when they talk with their health care providers about treatment options.”

As an example of rising costs, the AARP cites a patient with rheumatoid arthritis on Medicare who could pay as much is $29,390 a year in out-of-pocket expenses for a specialty drug.

Last month, the AARP released a report about rising prescription drug prices, noting that the average annual cost for widely used specialty drugs was $78,871 in 2017, while the median income of most Medicare beneficiaries is just $26,200.

Allowing the HHS to move forward will allow consumers to have more informed discussions with their providers, because they can compare list prices of different medications, AARP said. For beneficiaries on Medicare Part D, coinsurance is based on the list price, the organization noted.

The pharmaceutical industry, as represented by the lobbying group PhRMA, is opposed to HHS’ position, believing that any disclosure of prices should be voluntary.