No Wholesale Pricing Disclosures to be Required in Drug Advertising – Appeals Court Upholds Lower Court Rejection of HHS Requirement
By: David Oxenford, Wilkinson Barker Knauer LLP
It appears that there will be no requirement imposed on television and cable ads to include disclosures revealing the wholesale prices of prescription drugs in any advertising for those drugs. We wrote about the decision from the US Department of Health and Human Service to impose such a requirement on television ads here, and we wrote here about last year’s determination of a federal District Court throwing out the requirement, finding that HHS had no statutory authority to impose that requirement. This week, the US Court of Appeals rejected an HHS appeal of the District Court decision. The decision found that it was not reasonable for HHS to determine that Congress had given HHS authority, based simply on the authority to administer Medicare and Medicaid programs, to impose such an obligation on the commercial speech of advertisers in advertising their prescription drugs. As HHS could not show how this ban was necessary for the administration of these programs, or would even necessarily lead to the cost savings given as the justification for the requirement, the appeals court upheld the lower court decision striking down the price disclosure obligation.
NAB and NCTA, on behalf of the broadcast and cable industries, filed briefs supporting this outcome. Based on this decision, television advertisers will not be obligated to disclosure any wholesale pricing information absent some future intervention by Congress.
David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).
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