In May, the U.S. Department of Health and Human Services (“HHS”) finalized a new regulation requiring pharmaceutical companies to disclose the list price of a drug in any television advertisements. This regulation, titled “Medicare and Medicaid Programs; Regulation To Require Drug Pricing Transparency” (also known as the Wholesale Acquisition Cost, or WAC, Disclosure Rule), was set to go into effect on July 9, 2019.
Earlier this month, however, just one day before the regulation was set to go into effect, U.S. District Judge Amit P. Mehta vacated HHS’s proposed regulation. Judge Mehta stated in his Opinion that “the WAC Disclosure Rule represents a significant shift in HHS’s ability to regulate the health care marketplace” and found that “HHS lacks the statutory authority under the Social Security Act to adopt the WAC Disclosure Rule.” Judge Metha further noted that “no matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized,” and that “[t]he responsibility rests with Congress to act in the first instance.”
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