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* Congressional _______
a Research Service
Informing the Iegislative debate since 1914
Drug Price Disclosures and the First
Amendment
May 13, 2019
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. (A future 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.
The rule also requires that the statement be presented in a legible manner, meaning that it is placed
appropriately and is presented against a contrasting background for sufficient duration and in a size and
style of font that allows the information to be read easily. The quoted provisions are identical to the rule
proposal that CMS issued in late 2018. CMS says that the rule is intended to improve the efficient
administration of the Medicare and Medicaid programs by providing consumers with relevant
information about the costs of prescription drugs, ensuring that they can make informed decisions to
minimize costs.
Congressional Research Service
https://crsreports.congress.gov
LSB10298
CRS Legal Sidebar
Prepared for Members and
Committees of Congress](ViewImageLocal?handle=hein.crs/govzra0001&div=1&collection=&method=preview&ext=.png&size=3)