Biden admin hit with lawsuit for ignoring Trump-era drug price transparency rule
Posted For: Layla Godey
A government watchdog group sued the Biden administration on Thursday for failing to comply with a Trump-era rule that requires more transparency in prescription drug prices.
The Foundation for Government Accountability (FGA) filed a lawsuit against the Department of Health and Human Services (HHS), Department of Labor and the Department of the Treasury for lack of enforcement of a Trump-era drug price transparency rule that required group health plans and health insurers to give consumers information about the price they will pay for medications under their plans.
The Transparency in Coverage rule was finalized in 2020, and the drug price transparency provision was set to take effect on Jan. 1, 2022. But before it could, the Biden administration released a guidance document to block enforcement of the rule – FGA says the move circumvented the required notice-and-comment procedures that must take place before changes can be made to an existing regulation.
“Patients have a fundamental right to control their own health care decisions, and that includes budgeting for medical expenses and prescriptions,” said Tarren Bragdon, president and CEO of FGA. “Without full pricing information, families are left with higher costs and lower confidence in our health care system.”
FGA says if the Trump-era rule were implemented, consumers could choose insurance plans with a full understanding of what the companies are charging for prescription drugs – creating more competition in the market, which can lower costs for consumers.
The lawsuit says that the “lack of transparency” imposes a number of harms, including to patients.
“Increased enrollment in [high deductible health plans] and the shift to coinsurance across plan and benefit designs means that [patients] have a vested interest in learning the costs of care prior to paying for items or services, as they are responsible for paying out-of-pocket expenditures, which are directly dependent on the negotiated or contractual price,” the group said.
“But [w]hen [patients] seek care, they do not typically know whether they could have received the same service from another provider at lower prices,” the lawsuit says.
“This lack of competition in many health care markets is demonstrated by significant, unexplained variations in prices for procedures, even within a single region. But research show[s] how price transparency leads to lower and more uniform pricing in health care markets,” the lawsuit states.
FGA says the Biden administration’s refusal to enforce this rule effectively repeals the price transparency consumers were accepting to help lower medical expenses. This happened at a time when more than 1,200 prescription drugs saw their prices increase faster than inflation between 2021 and 2022, according to a HHS report from September 2022 that said the average price increase for prescription drugs was 31.6 percent.
“Some drugs in 2022 increased by more than $20,000 or 500%,” according to that report.
The lawsuit was filed in federal court in the Middle District of Florida. FGA is asking the court to force the Biden administration to abide by the Trump-era rule immediately.