Rebuking Trump on Drug Prices

The Wall Street Journal Editorial Board

One abuse of the Trump years has been federal judges who exceed their power to strike down directives they don’t like on policy grounds, from association health plans to the travel ban. But on Monday the Trump Administration received a deserved rebuke on an extralegal rule on drug pricing.

Federal Judge Amit Mehta blocked a Health and Human Services rule that would require many drug manufacturers to disclose the list price of drugs in television advertisements. Such transparency sounds innocuous, though in practice consumers learn nothing about their out-of-pocket costs after insurance. With side-effect warnings, a 30-second ad would tell viewers: Don’t buy this; it’s expensive and may kill you.

Yet the infirmities are more legal than practical. The Administration justified the rule by invoking catch-all sections of the Social Security Act that say the HHS Secretary shall make rules “as may be necessary to the efficient administration” of the law and running Medicare and Medicaid.

Judge Mehta wrote that the agency had clearly exceeded its statutory authority: “Neither the Act’s text, structure, nor context evince an intent by Congress to empower HHS” to issue such a rule. The opinion invokes Supreme Court precedent in a ruling by the late Justice Antonin Scalia that when an agency “claims to discover in a long-extant statute an unheralded power to regulate” a significant portion of the American economy, courts should “greet its announcement with a measure of skepticism.” Hear, hear.

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