James Shehan, JD: List Prices in Drug Advertising

James Shehan, JD, chair of regulatory practice at Lowenstein Sandler, LLP, discusses HHS’ proposal to require that drugs’ list prices appear in direct-to-consumer advertising.


The Trump administration has signaled that it will require drugs’ list prices to be included in direct-to-consumer advertising. Are there any legal complexities with this proposal?

The administration’s TV drug pricing proposal—we’re going to be hearing about for a while, I think. It’s clear that the industry came out the day that the plan was rolled out in saying that they were going to challenge it legally—pharma did. And there’s certainly grounds for a first amendment challenge, to be seen whether it’s a challenge that will be upheld. But one can say that the proposal, which is actually a rule that has been put out there, will be attacked for saying that it puts out information that is misleading. It doesn’t tell people what they really need to know about the actual pricing of drugs.

So, if you look at other mandatory pricing, like, for example, gas stations which have to post prices, there you really know what am I going to pay for a gallon of gas, whether it’s credit or cash, which is always funny because you know, the cash is always such a discount.

But, will this proposal ever see the light of day? It’s a rule, so it has to go through the regulatory process—in other words, comments, and then be finalized before it takes effect. That process…you can be fast-tracked but it usually takes a couple years so you know, it’s out there, it can be pointed to [by] the administration as a way that they’re taking action, but we’re a long way from seeing it being implemented. I can imagine that if it were to be made a final rule that the industry at that point is going to try to seek an injunction to get the court case heard prior to anything going into effect.

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