Judge Blocks Trump Move on Prescription Drug Prices

President Donald Trump talks about drug prices during a visit to the Department of Health and Human Services in Washington on Oct. 25, 2018. (AP Photo/Susan Walsh)

WASHINGTON (CN) — Curbing the Trump administration’s breach of legislative authority, a federal judge blocked a rule that would have made drugmakers reveal medication pricing in television ads.

“To be clear, the court does not question HHS’s motives in adopting the … disclosure rule,” U.S. District Judge Amit Mehta wrote. “Nor does it take any view on the wisdom of requiring drug companies to disclose prices. That policy very well could be an effective tool in halting the rising cost of prescription drugs. But no matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized. The responsibility rests with Congress to act in the first instance.”

Slated to take effect Tuesday, the rule would have required drug companies to advertise the list price of their medications costing $35 or more for a one-month supply.

The Department of Health and Human Services finalized the rule in May under Secretary Alex Azar, the former president of the Eli Lilly U.S. Division.

Azar’s former employer in turn teamed up with fellow drugmakers Merck and Amgen by filing suit in Washington.

Mehta, an Obama appointee, ruled Monday that the regulation would amount to a federal incursion into the health care market.

A victory in the case would have been a boon to President Donald Trump as he sets out on the 2020 campaign trial. Emphasizing the importance of the proposed rule in May, Azar said it represented “the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the health care they receive.”

HHS spokeswoman Caitlin Oakley voiced disappointment in Monday’s ruling, adding that the administration “will be working with the Department of Justice on next steps related to the litigation.”

Mehta did not weigh in on whether drugmakers should have to disclose prices and noted that the court had no reason to question the agency’s motives.

But he warned that the rule represents a leap in regulatory authority beyond what Congress prescribed when it granted Health and Human Services the power to issue regulations.

“It is the agency’s incursion into a brand-new regulatory environment, and the rationale for it, that make the rule so consequential,” the opinion states. “To accept the agency’s justification here would swing the doors wide open to any regulation, rule, or policy that might reasonably result in cost savings to the Medicare and Medicaid programs.”

The U.S. Department of Justice declined to comment on the ruling. Attorneys at Latham Watkins, representing the drug companies, did not respond to a request for comment.

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