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Daily Brew: May 14, 2019

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May 14, 2019

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Today's Brew highlights a court decision overturning an approved ballot initiative in South Dakota + a new rule requiring prescription drug commercials to disclose prices  
The Daily Brew

Welcome to the Tuesday, May 14 Brew. Here’s what’s in store for you as you start your day:

  1. South Dakota’s ban on out-of-state contributions for ballot measure campaigns ruled unconstitutional
  2. New federal rule requires drug advertisements to explicitly state prices
  3. One week to go before Kentucky’s gubernatorial primaries May 21

South Dakota’s ban on out-of-state contributions for ballot measure campaigns ruled unconstitutional

In 2018, South Dakota became the first state to approve a ban on contributions to ballot measure campaigns from outside of the state. Voters approved the citizen initiative—Initiated Measure 24—55.5 to 44.5 percent.

On Thursday, a federal district court overturned Initiated Measure 24 in a decision that applies to two lawsuits filed against the measure. The ruling, by Justice Charles Kornmann of the United States District Court for the District of South Dakota, declared that Measure 24 violated the First Amendment by impeding political free speech rights and the Commerce Clause of the U.S. Constitution by interfering with the transfer of money from one state to another. Kornmann joined the court in 1995 after being nominated by President Bill Clinton. The decision blocks South Dakota from enforcing the initiative, which was set to become effective on July 1, 2019.

In 2016, Ballotpedia identified $12.5 million in campaign contributions in support of or opposition to ballot measures in South Dakota. Out-of-state donors accounted for 75%—or $9.4 million—of ballot measure campaign contributions.

Kornmann said the evidence in the case “demonstrates how important out-of-state contributions are for the ballot question committees to pursue political speech. The State cannot enact restrictions that so completely prevent those pursuing unpopular laws from amassing the resources necessary for effective advocacy.”

Tim Bormann, chief of staff for Attorney General Jason Ravnsborg (R), said in an email to the Associated Press that the attorney general’s office was considering the ruling and “examining the avenues available to our office that best coincide with protecting the best interests of the people and the State of South Dakota.”

When the measure was originally proposed in 2017, Paul S. Ryan, a vice president at Common Cause, told the U.S. News & World Report that he did not expect the initiative to survive a court challenge. He stated that a 1981 U.S. Supreme Court decision, Citizens Against Rent Control v. City of Berkeley, held that contributions to ballot measure committees cannot be limited under the First Amendment.

In 2017, bills to prohibit or restrict out-of-state spending on ballot measure campaigns were introduced—but ultimately not approved—in Arizona, North Dakota, and South Dakota.

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New federal rule requires drug advertisements to explicitly state prices

A new rule published last week by the Centers for Medicare & Medicaid Services (CMS), an agency within the Department of Health & Human Services (HHS), requires pharmaceutical companies to include the list price, also known as the wholesale acquisition cost, of certain prescription drugs in television advertisements. The requirement applies to medicine covered by Medicare or Medicaid.

According to the summary of the final rule published in the Federal Register, the rule is intended to make Medicare and Medicaid administration more efficient by giving beneficiaries of the programs more information about the costs of drugs. CMS argues that the new rule will use public scrutiny to pressure manufacturers into lowering drug prices and will equip patients to make more informed healthcare decisions.

Under the rule, television advertisements for prescription drugs will be required to state the cost for a 30-day supply. The disclosure will not be necessary for drugs with a cost of $35 or less.

Health & Human Services Secretary Alex Azar said in a press release that “Requiring the inclusion of drugs’ list prices in TV ads is the single most significant step any administration has taken toward a simple commitment: American patients deserve to know the prices of the healthcare they receive.” He added, “Making those prices more transparent is a significant step in President Trump’s efforts to reform our prescription drug markets and put patients in charge of their own healthcare.”

Several public comments submitted to CMS before it finalized the rule argued that the proposal went beyond the agency’s authority under the Social Security Act. The commenters said that the provisions of the Social Security Act being interpreted by CMS in the final rule are general housekeeping measures and “not broad delegations of authority.” Public comments also addressed whether the rule violated free speech provisions of the First Amendment and whether the wholesale acquisition cost, which doesn’t include discounts or rebates, was the appropriate price to be disclosed.

The final rule is effective July 9, 2019.

One week to go before Kentucky’s gubernatorial primaries May 21

We’re one week out from Kentucky’s statewide primaries. Next Tuesday (May 21), the Democratic and Republican parties will nominate gubernatorial candidates. Four candidates are running in each primary. Incumbent Gov. Matt Bevin (R), who was first elected in 2015, is running for re-election to a second term. The general election takes place on November 5.

In the Republican primary, Bevin faces state Rep. Robert Goforth, Ike Lawrence, and William E. Woods. Through April 21, Bevin had raised $814,000, Goforth $766,000. Lawrence $51,000 and Woods $147. Vice President Mike Pence hosted a campaign event for Bevin at which he announced, “I bring the full and total endorsement of the 45th president of the United States of America,” according to The Courier-Journal.

The Democrats running are Kentucky House Minority Leader Rocky Adkins, state Attorney General Andy Beshear, former state Auditor Adam Edelen, and retired engineer Geoff Young. Through April 21, Edelen had raised $2.35 million, Beshear $1.87 million, Adkins $1.51 million, and Young $54,000. Fifteen televised ads have aired on behalf of candidates in this race.

Secretary of State Alison Grimes (D) announced on May 2 that a record 3,421,796 Kentuckians were registered to vote in the gubernatorial primary. In 2015, 214,187 votes were cast in the Republican primary and 178,514 votes were cast in the Democratic primary.

Heading into the election, Kentucky is one of 22 Republican trifectas, meaning that the party controls the governor's office and both chambers of the state legislature. Kentucky does not provide for early voting or unexcused absentee voting.


See also

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