A new rule requires pharmaceutical companies to include the list price of some prescription drugs in television advertisements. The requirement applies to medicines covered by Medicare or Medicaid dollars, according to a final rule published by the Centers for Medicare & Medicaid Services (CMS) on May 10, 2019.

 

The agency intends for the rule to make Medicare and Medicaid administration more efficient by giving beneficiaries of the programs more information about the costs of drugs, according to the summary of the final rule published in the Federal Register.

 

The CMS final rule aims to make drug prices more transparent and “is the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the healthcare they receive,” according to U.S. Department of Health and Human Services (HHS) Secretary Alex Azar. The rule requiring companies to disclose prices in TV ads is part of a broader Trump administration plan aimed at reducing prescription drug prices. CMS argues that the new rule will use public scrutiny to pressure manufacturers into lowering drug prices and will equip patients to make more informed healthcare decisions.

 

Several public comments submitted to CMS before it finalized the rule argued that the proposal went beyond the agency’s authority under the Social Security Act. The commenters said that the provisions within the Social Security Act interpreted by CMS in the final rule are general housekeeping measures and “not broad delegations of authority.” CMS responded by arguing that the law empowers the secretary of HHS to issue “regulations as necessary for the efficient administration of Medicare and Medicaid.” The agency argued that the pricing disclosure requirements are acceptable since Secretary Azar determined that they were necessary to carry out the administration of Medicare and Medicaid.

 

The final rule is effective on July 9, 2019.

 

The Federal Register is a legal newspaper that contains proposed and finalized agency rules and regulations in addition to policy statements, interpretations of existing rules, and presidential documents like executive orders.

 

A final rule, in the context of administrative rulemaking, is a federal administrative regulation that went through the proposed rule and public comment stages of the rulemaking process and is published in the Federal Register with a scheduled effective date. The published final rule marks the last stage in the rulemaking process and includes information about the rationale for the regulation as well as any necessary responses to public comments.