HHS Files Brief In D.C. Circuit Supporting Drug Pricing Transparency Rule

As promised, the Department of Health and Human Services (HHS) filed a brief in the United States Court of Appeals for the District of Columbia Circuit challenging the district court's holding that the Secretary lacked the authority to compel drug manufacturers from disclosing drug prices in direct-to-consumers television advertisements (DTC rule). For additional background, check out our prior posts: here, here, and here. On September 23, 2019, HHS filed its appeal in the D.C. Circuit against plaintiffs Merck & Co., Eli Lilly and Co., and Amgen Inc. The brief argues that the district court erred in holding that HHS lacks the statutory authority through the Social Security Act (SSA) to force the DTC rule upon drug manufacturers because they are not direct participants in the Medicare and Medicaid programs.

The opening brief maintains that HHS has statutory authority to promulgate the DTC rule through 42 U.S.C. § 1395hh(a)(1) of the SSA, which provides, "[t]he Secretary shall prescribe such regulations as may be necessary to carry out the administration of the insurance programs."

The appeal stresses that the district court incorrectly assumed that the Food, Drug, and Cosmetic Act (FDCA) limits the authority of HHS in the area of drug price advertising. While the Food and Drug Administration (FDA) has authority over drug manufacturers in terms of advertisements for pharmaceuticals, HHS points out that authority relates to safety and efficacy disclosure and does not prohibit the Centers for Medicare & Medicaid Services (CMS) from requiring different disclosures to advance different goals. Instead, HHS argues that just because Congress "deliberately and precisely legislated in the area of drug marketing under the FDCA" giving FDA authority over drug advertisements, Congress did not implicitly disallow HHS from regulating marketing of drugs under a different authority, namely the DTC rule.

According to the brief, the district court erred in concluding that advertising by...