Drug Companies Fight Back on TV Ad Pricing

Merck, Eli Lilly and Amgen take the HHS to court.

A little over a month following the announcement by the Department of Health and Human Services (HHS) that pharma companies would soon have to include drug prices in their TV commercials, a coalition was formed to fight the decision.

The group, which includes Merck & Co., Eli Lilly, Amgen and the Association of National Advertisers (ANA), is suing HHS and the Centers for Medicare & Medicaid Services (CMS). A lawsuit has been filed to block the rule, which the groups believe is unnecessary and unlawful. The rule takes effect July 9; the District Court is expected to take action before then.

The group claims that HHS has no statutory authority to create the rule and that the rule violates the First Amendment. At issue is the fact that actual costs for consumers varies across different types of insurance coverage and are generally much lower than list prices –– including list prices in advertising materials will therefore only confuse consumers. Stating a single price in a TV ad will be misleading and inaccurate for millions of viewers.

Some companies, including Amgen, agree that consumers need to be provided clear and relevant information so they can understand the costs of their medications up front. Amgen, however, doesn’t believe that the “government-prescribed approach” outlined in the direct-to-consumer rule is appropriate, given both concerns about freedom of speech and the fact that the information specified will potentially confuse rather than help, consumers.

In the lawsuit, the group requests that the rule be vacated, but notes that it supports the DTC Principles plan developed by the Pharmaceutical Research and Manufacturers of America (PhRMA), which would require that a link to information about pricing and potential out-of-pocket costs is included in TV ads.



Cynthia A. Challener, Ph.D.

Dr. Challener is an established industry editor and technical writing expert in the areas of chemistry and pharmaceuticals. She writes for various corporations and associations, as well as marketing agencies and research organizations, including That’s Nice and Nice Insight.