Biotech
Tuesday, February 13th, 2024 7:37 pm EDT
Key Points
- Dismissal of Lawsuit: A federal judge dismissed a lawsuit challenging Medicare’s new authority to negotiate prices for expensive prescription drugs. The lawsuit, brought by a major pharmaceutical industry lobbying group and two other organizations, was dismissed by U.S. Judge David Ezra of the Western District of Texas. This decision represents an initial victory for the Biden administration in its efforts to implement the key policy under the Inflation Reduction Act, aimed at making medications more affordable for seniors, despite potential impacts on pharmaceutical industry profits.
- Continued Legal Battle: Although the judge’s ruling is a significant development, it does not signify the end of the legal battle over the policy. The decision could potentially be appealed, and there are still pending cases challenging the constitutionality of the price negotiations by major pharmaceutical companies like J&J, Merck, and Bristol Myers Squibb. The pharmaceutical industry may aim to obtain conflicting rulings from federal appellate courts, possibly escalating the issue to the Supreme Court.
- Arguments and Counterarguments: The lawsuit alleged that the negotiations delegate excessive authority to the Department of Health and Human Services, violate the Eighth Amendment due to an excise tax, and deny due process by excluding public input. However, Department of Justice attorneys argued that one of the plaintiffs, the National Infusion Center Association (NICA), lacked standing because it doesn’t produce or sell prescription drugs subject to the negotiations. While the legal battle continues, Medicare has already begun issuing initial drug price offers to manufacturers, with final negotiated prices set to take effect in 2026.
The dismissal of a lawsuit by a major pharmaceutical industry lobbying group, along with two other organizations, marks an early victory for the Biden administration in its efforts to allow Medicare to negotiate prices for expensive prescription drugs. The decision supports a key policy aimed at making medications more affordable for seniors, potentially impacting pharmaceutical industry profits. While this ruling doesn’t conclusively resolve the legal battle, it sets a precedent that could influence future litigation, possibly even reaching the Supreme Court. U.S. Judge David Ezra of the Western District of Texas dismissed the suit brought by the Pharmaceutical Research and Manufacturers of America (PhRMA), the Global Colon Cancer Association, and the National Infusion Center Association (NICA), arguing that NICA’s claims fall under the Medicare Act and require administrative review before court involvement. As NICA was the only plaintiff based in the district, the rest of the case was dismissed. PhRMA expressed disappointment but is considering further legal action. The pharmaceutical industry may seek appeals, aiming to obtain conflicting rulings from federal appellate courts to escalate the issue to the Supreme Court. Separate lawsuits by major drug companies challenging the constitutionality of the price negotiations are still pending. The original lawsuit alleged that the negotiations grant excessive authority to the Department of Health and Human Services, violate the Eighth Amendment due to an excise tax, and deny due process by excluding public input. Department of Justice attorneys countered that NICA lacked standing as it doesn’t produce or sell prescription drugs subject to the negotiations.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/13/medicare-drug-price-negotiations-judge-tosses-phrma-lawsuit.html
