CMS Issues Final Rule Requiring Disclosure of Drug and Biologic “List Prices” in Television Advertisements: Challenges Associated with Lanham Act Enforcement and First Amendment Implications
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- On May 8, 2019, the Centers for Medicare and Medicaid Services (“CMS”) released a final rule (the “Final Rule”) requiring a television advertisement for a direct-to-consumer (“DTC”) prescription drug or biologic that is covered by Medicare or Medicaid to disclose the product’s “list price.” The rule will become effective on July 9, 2019.
- The Final Rule confirms that private lawsuits filed pursuant to Section 43(a) of the Lanham Act will be the primary enforcement mechanism; however, reliance on this mode of enforcement may prove challenging.
- The Final Rule is likely to be challenged under the First Amendment based upon allegations that it unlawfully compels commercial speech. Success may depend, at least in part, upon the level of scrutiny applied by the courts based upon First Amendment precedent.