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UPDATE 1-U.S. judge halts rule requiring drug prices in TV ads

Tina Bellon and Nate Raymond

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July 8 (Reuters) - A federal judge on Monday blocked the Trump administration from implementing a new rule that would force pharmaceutical companies to include the wholesale prices of their drugs in television advertising.

U.S. District Judge Amit Mehta in Washington, D.C., sided with drugmakers Merck & Co Inc, Eli Lilly and Co and Amgen Inc by halting the U.S. Department of Health and Human Services (HHS) rule from taking effect on Tuesday as planned.

HHS Secretary Alex Azar announced the rule on May 8, saying that forcing drugmakers to disclose their prices in direct-to-consumer TV advertising could help drive down skyrocketing prescription drug costs if the companies were embarrassed by them or afraid they would scare away customers.

The rule was originally suggested last May as part of U.S. President Donald Trump's "blueprint" to lower prescription drug costs for U.S. consumers.

Under the rule the wholesale, or list, price would be included if it is $35 or more for a month's supply or the usual course of therapy. HHS said the 10 most commonly advertised drugs have list prices of $488 to $16,938 per month or for a usual course of therapy.

Many drugmakers have opposed the rule. The largest industry lobbying group, Pharmaceutical Research and Manufacturers of America (PhRMA), said that the list prices could be confusing for patients and discourage them from seeking medical care.

Merck, Eli Lilly and Amgen filed their lawsuit alongside the advertising trade group the Association Of National Advertisers on June 14, arguing the rule would confuse consumers by forcing them to disclose a price irrelevant to patients with insurance.

Drugmakers have long argued that list prices do not reflect the actual cost of drugs as they do not take into account discounts and rebates negotiated with health insurers and pharmacy benefit managers to ensure patient access to the medicines.

The lawsuit alleged that HHS lacked authority to issue the rule and that it violated their free speech rights under the First Amendment of the U.S. Constitution.

The U.S. Justice Department defended the rule in court, saying it met a standard the U.S. Supreme Court set in 1985, when it held the government can force advertisers to disclose factual, non-controversial information. (Reporting by Tina Bellon in New York, Nate Raymond in Boston Editing by Bill Berkrot)