Merck & Co., Inc. v. United States Department of Human and Health Services, No. 19-5222 (D.C. Cir. 2020)Annotate this Case
Drug manufacturers challenged the Department's rule that broadly requires drug manufacturers to disclose in their television advertisements the wholesale acquisition cost of many prescription drugs and biological products for which payment is available under Medicare or Medicaid.
The DC Circuit affirmed the district court's judgment in favor of the drug manufacturers, holding that the Department acted unreasonably in construing its regulatory authority to include the imposition of a sweeping disclosure requirement that is largely untethered to the actual administration of the Medicare or Medicaid programs. The court explained that, in the overwhelming majority of cases, the price that the rule compels manufacturers to disclose bears little resemblance to the price beneficiaries actually pay under the Medicare and Medicaid programs. Therefore, the court held that there is no reasoned statutory basis for the Department's far-flung reach and misaligned obligations, and thus the rule is invalid and is hereby set aside.