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October 03, 2019

HHS Files Brief in D.C. Circuit Supporting Drug Pricing Transparency Rule

On September 23,HHS filed an appellate brief in the United States Court of Appeals for the District of Columbia Circuit against Appellees Merck & Co., Eli Lilly and Co., and Amgen Inc. HHS argued that the Social Security Act provides it with the statutory authority to force the Drug Transparency Cost (DTC) rule upon drug manufacturers, despite the lower court’s holding that HHS lacks that authority because the drug manufacturers do not directly participate in Medicare and Medicaid. HHS also challenged the district court’s assertion that the Food, Drug, and Cosmetic Act limits the authority of HHS in the area of drug price advertising. HHS further argued that the DTC rule would increase the efficiency of both Medicare and Medicaid “by improving drug price transparency and informing consumer decision-making.” HHS asserted that these factors “would increase competitive pricing between drug manufacturers and slow spending on prescription drugs."  Absent the DTC rule, HHS warns that the rise in prescription drug costs could “pose a grave threat to Medicare and Medicaid."