Efforts to Halt Law Allowing Medicare to Negotiate Drug Prices

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The pharmaceutical industry continues to fight against a law that permits the Medicare program to negotiate the prices of certain prescription drugs. In a recent development, the U.S. Chamber of Commerce has filed a motion for a preliminary injunction, requesting a judge to prevent the federal government from implementing sections of the Inflation Reduction Act. These sections, scheduled to take effect in 2026, would grant Medicare the ability to negotiate prices for some medications.

The pharmaceutical industry and its allies are engaged in a comprehensive legal campaign aimed at repealing this law. Companies in the industry are concerned that it could impact profits, hinder the development of specific drugs, and fundamentally alter their risk and revenue calculations. The ability for Medicare to negotiate drug prices, even if only for a limited number of new drugs, challenges the industry’s current unrestricted pricing power within the United States. Consequently, overturning this law has become the industry’s primary objective in Washington.

The case filed by the U.S. Chamber of Commerce in Ohio is one of four lawsuits recently launched in federal courts across the nation by the pharmaceutical industry and its allies. Merck (MRK), Bristol Myers Squibb (BMY), and PhRMA, the industry’s lobbying group, have also filed lawsuits. However, no motions for preliminary injunctions have been submitted in those cases to date. The U.S. Chamber of Commerce’s motion was accompanied by a declaration of support for the injunction from an executive at AbbVie (ABBV).

The Legal Battle Over the Price Negotiation Program

The industry’s legal efforts are progressing on two fronts. Firstly, the plaintiffs are seeking a Supreme Court ruling that would declare the entire program as unconstitutional. Both Merck and Bristol have enlisted the services of seasoned Supreme Court litigators, with Bristol’s lead attorney being Noel Francisco, the former Solicitor General of the United States under President Trump.

However, a Supreme Court decision is a lengthy process. Therefore, the Chamber is pursuing a short-term solution, as revealed in their recent filing. They are requesting an injunction, which would halt CMS (Centers for Medicare & Medicaid Services) from proceeding with its preparations for the negotiation program. CMS has already outlined a busy schedule of preparations, including an announcement on September 1st regarding the first 10 drugs eligible for negotiation in 2026.

AbbVie, in a declaration submitted as part of the Chamber’s filing, claims that it is already experiencing harm as a result of the program. They anticipate this harm to become more pronounced after October 1st when companies whose drugs fall within the first group eligible for negotiation will enter into agreements with CMS to accept the negotiated price. AbbVie expects its cancer drug, Imbruvica, to be among the drugs in this initial group.

The Chamber, in their motion for an injunction, argues that the price negotiation program violates the due process clause of the Fifth Amendment to the U.S. Constitution. They contend that the law “violates well-established due process principles.”

The case is being presided over by Judge Thomas M. Rose, who was appointed to the federal bench by President George W. Bush in 2002. Any decisions made by Judge Rose can be appealed to the U.S. Court of Appeals for the Sixth Circuit.

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