DOJ, Chamber of Commerce Tussle in Court Over IRA’s Drug Price Negotiations
Pictured: Facade of the New York Chamber of Commerce/iStock, LUNAMARINA
Lawyers for the Department of Justice and the U.S. Chamber of Commerce sparred on Friday in the first hearing in federal court in Ohio over the Inflation Reduction Act’s Drug Price Negotiation Program, as reported by Politico.
The Chamber of Commerce has asked for a preliminary injunction to halt the program before Oct. 1, the deadline for pharma companies to agree to Medicare negotiations on pricing for the first 10 drugs.
At the heart of the debate on Friday in the U.S. District Court for the Southern District of Ohio were two issues, according to STAT News. The first was whether the negotiation program was merely a price control program—thereby violating companies’ rights—and the second was whether the Chamber's members would incur damages sufficient to file a complaint against the law.
Jeffrey Bucholtz from the law firm King & Spalding argued for the Chamber and other industry groups, asking that Judge Michael Newman release his ruling on the motion for a preliminary injunction by Oct. 1. Under the program, drugmakers have until that date to signify if they will participate in the first round of negotiations.
In its request for an injunction, the Chamber contends that the IRA has and will continue to cause its members “unrecoverable economic losses.”
However, DOJ countered that the Chamber doesn’t have legal standing to challenge the Drug Price Negotiation Program and the court should throw out the case given that any financial injury to drugmakers wouldn’t happen until 2026, when the negotiated prices take effect.
Judge Newman on Friday said he would issue a decision “as quickly as we can” while praising the “zealous advocacy” of attorneys in making their arguments, according to Pink Sheet.
Last month, the Centers for Medicare and Medicaid Services (CMS) named the first 10 drugs that would be a part of the initial price negotiations. The list included some of the most widely prescribed medications, such as BMS’ blood thinner Eliquis (apixaban), Lilly’s diabetes drug Jardiance (empagliflozin) and AbbVie’s and J&J’s blood cancer therapy Imbruvica (ibrutinib).
In crafting its initial list, the CMS looked at medicines with the highest gross Medicare Part D coverage, paying particular attention to those without generic or biosimilar competition. Taken together, these treatments cost the government around $50 billion between June 2022 and May 2023, according to a CMS factsheet.
Under the negotiation program, CMS would be able to negotiate the prices for these drugs with the goal of generating $25 billion in cost savings over the next eight years.
Ever since President Joe Biden signed the IRA into law in August 2022, pharma companies and industry groups have strongly opposed the measure. Several lawsuits have already been filed seeking to stop the negotiation program. Industry powerhouses such as Merck, BMS, J&J and AstraZeneca have all filed separate complaints against the program.
Similar to the Chamber of Commerce, the companies claim that the IRA’s Drug Price Negotiation Program is unconstitutional as it effectively is a forced taking of their property without just compensation. The program also compels drugmakers to agree that CMS’ prices are fair, according to their respective legal complaints, thereby violating their First Amendment rights.