U.S. District Judge Amit Mehta has blocked temporarily a Trump administration rule requiring drug makers to put a drug’s list price in television ads pending resolution of a lawsuit on the policy.
The court ruled that the Health and Human Services Department would violate free speech and exceed the agency’s statutory authority, according to an article on Seeking Alpha on Tuesday. The government didn’t have the authority to impose the rule without Congress taking action, Mehta said, in a subsequent Barron’s article.
The lawsuit was originally filed by pharma giants Merck & Co., Eli Lilly & Co. and Thousand Oaks-based Amgen Inc., as well as the Association of National Advertisers.
The drug makers argued that list prices do not take into account discounts and rebates through health insurance companies and pharmacy benefit managers.
The federal rule is the latest in a series of proposals that attempt to curb rising prescription drug prices. Although the court decision stops the rule for now, the Trump administration will discuss its next step with the Justice Department.
Shares of Amgen (AMGN) closed Tuesday down 65 cents, or a fraction of a percent, to $181.59 on the Nasdaq.