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Congressional ______
*.Research Service
Drug Price Disclosures and the First
Amendment
Updated July 9, 2019
Update: On July 8, 2019, the US. District Court for the District of Columbia held that the Department of
Health and Human Services (HHS) exceeded its statutory authority in promulgating its new rule on drug
list price disclosures. As the court explained, [n]either the [Social Security] Act's text, structure, nor
context evince an intent by Congress to empower HHS to issue a rule that compels drug manufacturers to
disclose list prices. The Rule is therefore invalid. The court ultimately vacated the rule. Because the
court concluded that the agency lacked the statutory authority to issue the rule, the court did not evaluate
whether the rule violated the First Amendment. HHS has not yet signaled whether it will appeal the
decision.
The original post from July 5, 2019 is below.
On May 10, 2019, the Centers for Medicare & Medicaid Services (CMS) published a final rule that will
require direct-to-consumer (DTC) television advertisements for certain prescription drugs and biologics to
include the wholesale acquisition cost of covered pharmaceuticals, also known as the list price, in those
ads. During the comment period on the rule, a number of commenters raised concerns about two distinct
legal issues: (1) whether the disclosure requirement would unlawfully compel advertisers' speech in
violation of the Free Speech Clause of the Constitution, and (2) even if the new rule is permissible as a
constitutional matter, whether CMS possesses the statutory authority to promulgate this rule in the first
place. This Sidebar investigates the first question. (Another Sidebar will focus on the statutory
interpretation issue.)
CMS Regulation to Require Drug Pricing Transparency
The final rule, scheduled to become effective on July 9, 2019, provides that DTC television ads for
prescription drugs and biological products for which payment is available under Medicare or Medicaid
must contain a textual statement indicating the current list price for a typical 30-day regimen or for a
typical course of treatment. The rule specifies the precise statement to be made:
The list price for a [30-day supply of] [typical course of treatment with] [name of prescription drug
or biological product] is [insert list price]. If you have health insurance that covers drugs, your cost
may be different.
Congressional Research Service
https://crsreports.congress.gov
LSB10298
CRS Legal Sidebar
Prepared for Members and
Committees of Congress](ViewImageLocal?handle=hein.crs/govbafs0001&div=1&collection=&method=preview&ext=.png&size=3)