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US Chamber Suffers Setback in Bid to Block Medicare Drug Talks (2) [1]
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Date: 2024-01
The Medicare agency may continue implementing its drug price negotiation program even as litigation over the plans play out in federal court, a judge ordered Friday.
The US Chamber of Commerce and several affiliates haven’t demonstrated a “strong likelihood” of succeeding on their claim that the Inflation Reduction Act’s drug price negotiation provisions violate the due process clause of the Fifth Amendment, wrote Judge Michael J. Newman for the US District Court for the Southern District of Ohio. The Chamber, whose members include drugmaker AbbVie Inc ., had used the due process argument as a basis for requesting a pause on the program.
The Chamber also failed to show it would suffer “irreparable harm” without a court-ordered halt to the negotiation timeline, Newman said.
The order is a win for the Biden administration, which also faces seven additional federal lawsuits seeking to topple the drug price negotiation program. Lawsuits from companies like Merck & Co. and Bristol-Myers Squibb Co. , as well as industry trade group the Pharmaceutical Research and Manufacturers of America, allege the IRA unconstitutionally forces drugmakers to lower prices for their products, which they claim would harm future pharmaceutical development.
Department of Justice attorneys had argued on behalf of the Department of Health and Human Services that the Chamber’s alleged injuries were speculative, the group lacked associational standing, and the case wasn’t ripe because negotiated prices have yet to be finalized.
Newman, an appointee of former President Donald Trump, also declined to grant the administration’s motion to dismiss this case.
Instead, Newman has asked the Chamber to file an amended complaint, allowing both sides to move forward with limited discovery. After this, the court will “entertain the filing of one or more renewed motion(s) to dismiss,” Newman wrote.
Neil Bradley, the Chamber’s executive vice president, said in an emailed statement Saturday that the group is “reviewing the court’s ruling and considering our options for next steps.”
“The price controls that we are challenging would reduce access to new medicines Americans are counting on to save and improve their lives and would set a very devastating precedent for all U.S. businesses,” Bradley said.
AbbVie markets the cancer drug Imbruvica, one of the first 10 selected by Medicare to have government-negotiated prices. The Medicare program spent more than $2.6 billion on Imbruvica from June 2022 to May 2023, according to CMS data.
AbbVie said in an email shortly after the judge’s order that it intends to participate in the price talks with Medicare “despite it not representing a legitimate negotiation.”
“Our engagement does not change or waive our position that the ‘negotiation’ program created by the IRA is unconstitutional, involuntary and threatens the future of scientific advancement for patients in the U.S., and around the world,” the company wrote.
Signature Component
The drug price negotiations are a signature component of the Biden administration’s plan to lower prescription drug costs. The Congressional Budget Office estimated the negotiations would save Medicare roughly $100 billion over 10 years.
Drug manufacturers subject to the first round of negotiations must sign agreements by Oct. 1 to enter the price talks, or risk financial penalties under the law. By Oct. 2, the companies must submit manufacturer-specific data to the CMS to help the agency make an initial offer on a product’s maximum fair price.
Some of the drugmakers that have individually filed lawsuits against the program— Merck & Co. , Boehringer Ingelheim Pharmaceuticals Inc. , Bristol-Myers Squibb Co. , and AstraZeneca Plc —have each publicly said they will be entering price talks with Medicare. The companies argue they have no choice but to enter the negotiation program, citing the hefty excise tax companies face if they don’t comply.
AARP, which filed an amicus brief in the Chamber case, praised Newman’s ruling Friday, arguing a pause on the negotiations “would have risked billions of dollars in savings for taxpayers—and countless lives.”
“We’re prepared to fight for as long as necessary to ensure big drug companies can’t charge excessive prices at the expense of patients’ health,” William Alvarado Rivera, senior vice president for litigation at AARP Foundation, said in an emailed statement.
The case is Dayton Area Chamber of Commerce v. Becerra, S.D. Ohio, No. 3:23-cv-00156, order 9/29/23
—With assistance from Nyah Phengsitthy
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