Drug Makers Sue to Block Requirement for Listing Prices in TV Ads

Three of the nation’s major drug manufacturers sued the Trump administration on Friday to block a rule that would force them to put the price of their drugs in television advertisements beginning this summer.

The lawsuit, filed Friday in federal court in Washington, D.C., by Merck, Eli Lilly and Amgen, as well as a trade group for advertisers, argues that the rule is illegal because it violates the companies’ First Amendment rights. It also claims that the ad disclosures, which require drug manufacturers to include the list price of any drug that costs more than $35 a month, could mislead consumers because insurers often cover the bulk of a drug’s cost.

“We believe the new requirements may cause patients to decide not to seek treatment because of their perception that they cannot afford their medications, when in fact many patients do not pay anything near list price,” Merck, whose top-selling product is the pricey cancer drug Keytruda, said in a statement.

Lilly, which is one of three manufacturers of insulin under scrutiny for rising list prices — said the federal government had overstepped its authority. “The impetus for the lawsuit is drug prices in TV ads, but the crux of it is H.H.S. not having the authority to mandate this action,” the company said in a statement, referring to the Department of Health and Human Services.

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The trade group, the Association of National Advertisers, was also listed as a plaintiff in the suit. Dan Jaffe, an executive vice president for the group, said they joined the suit because the rule “would substantially undermine First Amendment protections for advertisers and would certainly create precedent that would go far beyond the prescription drug area.”

Alex M. Azar II, the secretary of health and human services, announced the new rule in May, contending that forcing pharmaceutical companies to disclose their prices could push companies to lower them. He was a top executive at Lilly before joining the Trump administration in January 2018.

“If the drug companies are embarrassed by their prices or afraid that the prices will scare patients away, they should lower them,” Caitlin Oakley, a spokeswoman for the health and human services department, said in a statement. “President Trump and Secretary Azar are committed to providing patients the information they need to make their own informed health care decisions.”

Many drug companies, anticipating the rule, had set up their own websites with information that included list prices, as well as typical out-of-pocket costs and sources of financial assistance.

Johnson & Johnson said this year that its ads would begin disclosing the list price, starting with those for the anti-stroke drug Xarelto that carries a $448 monthly list price, along with information about the typical consumer co-payment.