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# Appeals Court Backs Rejection of Rule on Drug Price Ads
- URL: https://www.fdaweb.com/appeals-court-backs-rejection-of-rule-on-drug-price-ads/
- Published: 2020-06-16T12:00:00.000Z
- Updated: 2026-09-14T16:18:22.000Z
- Author: David McFarland
- Tags: Drugs, FDA Policy/General, #legacy-id-D5147017

The DC Circuit Court of Appeals has upheld a federal district court decision rejecting an HHS rule that broadly required drug manufacturers to disclose in their TV ads the wholesale acquisition cost of many prescription drugs and biologics for which payment is available under Medicare or Medicaid. The appeals court [decision](https://www.cadc.uscourts.gov/internet/opinions.nsf/0A5EA103BE5E53D185258589005371B9/$file/19-5222-1847403.pdf?ref=fdaweb.com) said the proposed rule had been challenged by some drug companies on statutory and constitutional grounds and they prevailed in the DC federal court. HHS had appealed that decision.

“In the overwhelming majority of cases,” the appeals court said, “the price that the disclosure rule compels manufacturers to disclose bears little resemblance to the price beneficiaries actually pay under the Medicare and Medicaid programs…. 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. Because there is no reasoned statutory basis for its far-flung reach and misaligned obligations, the disclosure rule is invalid and is hereby set aside.”