ANA Strongly Opposes New HHS Ad Disclosure Rule

Yesterday, the Department of Health and Human Services (HHS) finalized a new rule which would require “direct-to-consumer television advertisements for prescription pharmaceuticals covered by Medicare or Medicaid to include the list price … if that price is equal to or greater than $35.” ANA strongly opposes this government requirement which is highly likely to be unconstitutional.

Secretary of HHS Alex Azar has said before “You ought to know how much a drug costs and how much it’s going to cost you, long before you get to the pharmacy counter or get the bill in the mail.” However, implementing such a rule would do just the opposite. Due to rebates and insurance coverage, the majority of consumers who purchase prescription drugs do not pay the list price. It is obvious that this forced disclosure would lead to a large part of the public being misinformed by potentially misleading price disclosures.  

We further believe that it does not meet the constitutional test promulgated by the Supreme Court for governmentally mandated disclosures, and therefore would violate the First Amendment. In Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, the Supreme Court clearly stated that government mandated disclosures must be “factual and uncontroversial”. This proposed rule by HHS would not meet this test and is likely to be ineffective.

The Court also said in Thompson v Western States Medical Center that “if the First Amendment means anything, it means regulating speech must be a last—not first- resort.” There are clearly many other options to respond to prescription drug costs, and therefore, this proposal also fails this Supreme Court test.

In December, ANA and other leaders in the industry filed comments outlining the issues with such a mandated disclosure. The comments of The Advertising Coalition (TAC) argue that the HHS proposal is unconstitutional, misguided, and counterproductive.