U.S. District Judge David Ezra, appointed by Raegan, dismissed the lawsuit brought on by pharmaceutical industry group PhRMA aimed to challenge Biden’s Medicare drug price negotiations.
PhRMA is “disappointed”
The Pharmaceutical Research and Manufacturers of America group’s spokesperson Nicole Longo said in a statement, “We are disappointed with the court’s decision, which does not address the merits of our lawsuit, and we are weighing our next legal steps.”
Two other groups were involved
PhRMA was joined in the lawsuit by the National Infusion Center Association (NICA) and the Global Colon Cancer Association (GCCA). The Judge dismissed NICA because the court lacked jurisdiction. Since only NICA resides in Texas, the case was dismissed without prejudice, meaning it could be brought up again.
PhRMA’s lawsuit
In June 2023, PhRMA announced the lawsuit arguing that the Biden administration’s plan was “a violation of the separation of powers by delegating too much authority to the Department of Health and Human Services, and the Eighth Amendment’s ban on “excessive” fines, given the heavy excise tax companies have to pay if they refuse to negotiate.”
The White House is pleased by the ruling
“Despite Big Pharma’s attempts to block prescription drug negotiation, the Centers for Medicare and Medicaid Services is moving forward with their critical work to negotiate for lower drug prices for the first ten drugs selected for the negotiation program,” White House Press Secretary Karine Jean-Pierre said in a statement.
More lawsuits are pending
Among the most prominent ones are Johnson & Johnson, Merck & Co., and AstraZeneca. Oral arguments were already presented in the case of AstraZeneca. Overall, eight lawsuits are pending.
The first suit was filed over diabetes drug
Merck & Co. was the first drug company to file a lawsuit because their diabetes drug Januvia was one of the first ten drugs chosen for Medicare price negotiation in 2026.
The White House pushed back
The federal government wrote a lengthy response, saying in part, “Whether confronting regulations limiting physician fees, nursing-home payments, or hospital reimbursements, courts have been unequivocal: entities are not required to serve Medicare beneficiaries, and thus the government deprives them of no property interest for purposes of the Fifth Amendment when it imposes caps on the amount the government will reimburse.”
Making comparison
The response added, “Just as a defense contractor could not build an aircraft carrier and force an unwilling Pentagon to buy it (at any price), so too manufacturers cannot force their drugs onto the government at rates the government is unwilling to pay.”
Victory for Biden
The program, signed into law in 2022 under the Inflation Reduction Act, includes several requirements to lower prescription drug costs for people with Medicare and reduce federal drug spending. The Secretary of Health and Human Services (HHS) seeks to negotiate prices with drug companies for certain drugs.
The first ten medications to be open for negotiations
The first 10 Part D drugs selected for negotiation under Medicare’s new drug price negotiation program include diabetes, heart failure, blood clogs, Crohn’s disease, blood cancers, psoriasis, and arthritis drugs. Negotiated prices for these ten drugs will be available on January 1, 2026.
Americans pay more for prescription drugs than any other country
Reuters reported in 2023 that Americans pay far more for prescribed medications than any other country in the world. The Biden administration program wants to save $25 billion each year by 2031 by instructing pharmaceutical companies to negotiate prices with the U.S. Centers for Medicare and Medicaid Service (CMS), which oversees Medicare.
The cost of insulin by country
The average insulin price in 2018 in the U.S. was $99. Chile followed with a cost of $21. The highest price in Europe was reported to be $12 in Switzerland, while Turkey had the lowest price of $3.
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