May 9, 2019

New rule on drug prices is asking for lawsuits — literally

HHS Sec. Alex Azar and President Donald Trump talk about reducing drug costs. (Photo: Nicholas Kamm/AFP/Getty Images)

The Trump administration's newly finalized rules requiring drugmakers to include prices in their TV ads could spark a flurry of lawsuits — first to challenge the rules, and then to enforce them.

Between the lines: If the rule survives the legal challenges that may be coming its way, there are still plenty of questions about whether it'll actually help lower drug prices.

The big picture: The rule requires TV ads for most drugs to disclose their list prices, along with a statement that each patient's costs may depend on their insurance. (Here's what that looks like in practice.)

What they're saying: “We believe there are operational challenges...and think the final rule raises First Amendment and statutory concerns," the industry trade group PhRMA said in a statement yesterday.

  • The Advertising Coalition — which includes advertisers and broadcasters — also wrote in public comments that "the proposed regulation is a form of compelled speech prohibited by the First Amendment."
  • “There are plenty of potential challengers out there who could reasonably assert that they’d be damaged by implementation of the rule," Manatt Health's Ian Spatz said.

Yes, but: In the scheme of things, this isn't the biggest threat facing drugmakers right now.

  • "Sure, drug companies would prefer not to post their list prices. But everyone seems to agree that the rule won't accomplish much, so is it really worth the hassle of a lawsuit?" University of Michigan law professor Nicholas Bagley said. "PhRMA might save its powder for fights that matter more."

What's next: The regulation also relies on lawsuits to ensure compliance.

  • The federal government will keep a list of drugs whose ads violate the rule. Those manufacturers would then face the threat of lawsuits from their competitors.
  • "The big companies may be unlikely to sue one another under this provision, but smaller companies could sue bigger ones, or generic makers might bring actions for noncompliance," said former FDA Commissioner Scott Gottlieb.
  • But there's some skepticism that this is a workable enforcement mechanism.
  • "I think it's highly unlikely, 1) that competitors would be interested in doing this, and 2) that they’d have the ability to prove any competitive harm," Spatz said.

Go deeper

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 665,164 — Total deaths: 30,852 — Total recoveries: 140,225.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 3 a.m. ET: 124,665 — Total deaths: 2,191 — Total recoveries: 1,095.
  3. Federal government latest: President Trump announces new travel advisories for New York, New Jersey and Connecticut, but rules out quarantine enforcement. Per the CDC, residents of those states must now "refrain from non-essential domestic travel for 14 days," with the exception of critical infrastructure industry workers.
  4. State updates: Alaska is latest state to issue a stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month and has moved its presidential primary to June 23. Some Midwestern swing voters who backed Trump's handling of the virus less than two weeks ago are balking at his call for the U.S. to be "opened up" by Easter.
  5. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  6. 🚀 Space updates: OneWeb filed for bankruptcy amid the novel coronavirus pandemic.
  7. Hollywood: Tom Hanks and Rita Wilson have returned to U.S. after being treated for coronavirus.
  8. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Coronavirus updates: Global death toll tops 30,000

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

The novel coronavirus has now killed more than 30,000 people around the world — with Italy reporting over 10,000 deaths, per Johns Hopkins data.

The big picture: The number of deaths from COVID-19 in the U.S. surpassed 2,000 on Saturday. The United States leads the world in confirmed coronavirus infections — more than 124,000 by early Sunday. The number of those recovered from the virus in the U.S. passed the 1,000-mark on Saturday evening.

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Photo: Olivier Douliery/AFP via Getty Images

Gilead Sciences CEO Daniel O’Day said in an open letter Saturday the company is expanding access to its experimental anti-coronavirus drug remdesivir to include severely ill COVID-19 patients.

The big pig picture: President Trump has called the antiviral drug "promising," but the results of six clinical trials on this investigational medicine are still being conducted, so its effectiveness the treatment of the novel coronavirus has yet to be proved. The World Health Organization is involved in the tests.

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