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Biden Administration sued for failing to implement Trump-era prescription drug transparency rule

By Sarah May on
 March 24, 2023

A federal lawsuit was filed this week against the Biden administration over its apparent unwillingness to implement a Trump-era rule designed to increase prescription drug price transparency and, by extension, lower prices via free-market forces, as an op-ed New York Post explains.

According to Tarren Bragdon and Stewart Whitson of the Foundation for Government Accountability (FGA), the group that has initiated litigation in the matter, the Biden administration has quietly refused to follow the requirements of the rule, citing “enforcement discretion.”

Transparency rule unveiled

As Bragdon and Whitson note, the rule at issue was promulgated in late 2020 and required health insurance carriers to publish – for both individual and employer-sponsored group plans – drug pricing information that would foster transparency and exert downward pressure on costs.

Once consumers were able to make price comparisons among insurance companies, the prior administration believed, competition for their business would increase, and prices would drop.

Aiming to address the fact that, as then-Centers for Medicare and Medicare Services administrator Seema Verma noted, prescription drug prices “are about as clear as mud to patients,” the rule was poised to usher in a new era of consumer choice and free-market effects within a particularly vexing rea of the healthcare industry.

The Trump administration rule was set to take effect on Jan.1, 2022, but officials inside the Biden administration had other ideas.

Enforcement deferred

In August of 2021, the Biden administration began taking action to scuttle implementation of the Trump rule by issuing a “Frequently Asked Questions” document noting that the prescription drug price transparency measure would be deferred, as Bragdon and Whitson further explain.

The administration claimed that the time that “further rulemaking” would be pursued in the future but did not specify a timeline for such a process.

Biden officials claimed that the delay was appropriate because the Trump-era rule was essentially duplicative of the 2021 Consolidated Appropriations Act, however, as Bragdon and Whitson point out, that legislation merely requires insurance carriers to reveal drug pricing information to federal agencies, not to American consumers.

Based on additional information released by the Biden Treasury, Labor, and Health and Human Services Departments in 2022, it became clear that moves toward greater prescription drug price transparency were – and remain – on hold for the foreseeable future.

Legal battle begins

As president and CEO of FGA, Bragdon contends that “[t]wo years of inaction on drug price transparency is enough” and that his organization is committed to “taking the fight for transparency to federal court to force the Biden administration to follow the law, without exception and without delay,” filing suit in the U.S. District Court for the Middle District of Florida on Thursday.

“Refusing to enforce a rule on the books without following the formal process of withdrawing the rule is a violation of federal law,” Whitson – FGA's legal director – added. “There are no excuses left for the Biden administration: Either they are for transparency or against. Since they won't implement the rule on their own as the law requires, we're asking the federal court to order them to, delivering the transparency consumers deserve.”

Asserting that “The American people deserve to make informed choices with all cards face up,” Bragdon says that the Biden administration has “made that impossible by putting the needs of Big Pharma before the needs of patients.”

In FGA's view, “[u]ntil and unless the Biden administration delivers this legally required transparency, the president can't honestly claim he's delivering the broad prescription drug relief that Americans deserve.”

Biden touts administration strategy

The president, for his part, has continued to claim that his administration remains “intensely” focused on the task of reducing healthcare costs for Americans, reiterating that point during a recent speech in Las Vegas, as the Associated Press reported.

Biden specifically underscored his administration's success in forcing caps on the price of insulin for certain individuals, making many vaccines free of charge, and facilitating price negotiations on some pharmaceuticals for Americans receiving Medicare.

“Let's finish the job. Let's protect the lower prescription drug costs for everyone,” Biden said, after earlier declaring, “MAGA Republicans...think Big Pharma should be able to make the exorbitant profits at the expense of the American people.”

The approaches championed by Biden and FGA for achieving the stated objective of reducing prescription drug costs are undoubtedly at odds, and whether the courts will intervene to force implementation of an initiative already on the books that was designed with that goal in mind, only time will tell.