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Federal Judge Tosses Big Pharma Lawsuit Against Medicare Drug Price Negotiations
"Big PhRMA is so desperate to stop the Biden administration from lowering drug costs for seniors that they’re clogging the judicial system with spam lawsuits even in courtrooms they have no jurisdiction in."
Feb 13, 2024
A federal judge on Monday dismissed a lawsuit that the pharmaceutical industry's powerful trade group and allied organizations filed in an attempt to kill Medicare's new drug price negotiation program, which threatens manufacturers' virtually unrestrained power to drive up the prices of lifesaving medicines.
Judge David Alan Ezra of the U.S. District Court for the Western District of Texas tossed the lawsuit on procedural grounds, ruling that the National Infusion Center Association (NICA)—which does not manufacture or sell prescription drugs—lacked standing to sue.
Because NICA was the only plaintiff based in Texas, Ezra—a Reagan appointee—dismissed the lawsuit, which was joined by Pharmaceutical Research and Manufacturers of America (PhRMA) and the Global Colon Cancer Association. The coalition argued that the Medicare price negotiation program is unconstitutional, a claim that advocates have dismissed as cover for the industry's attempt to protect its profits.
A spokesperson for PhRMA, which spends tens of millions of dollars a year lobbying Congress, told Axios in a statement that the group is "disappointed" with the judge's decision and is weighing its next legal steps.
Tony Carrk, executive director of Accountable.US, said in response to Ezra's decision that "Big PhRMA is so desperate to stop the Biden administration from lowering drug costs for seniors that they're clogging the judicial system with spam lawsuits even in courtrooms they have no jurisdiction in."
"The big drug industry will say or do anything to strip away Medicare's new negotiation powers so that they can go back to business-as-usual price-gouging seniors on life-saving medicines," Carrk added.
The Lower Drug Prices Now campaign called on the "rest of the Big Pharma corporations suing Medicare" to stop fighting the program and "start negotiating."
The judge's ruling marks the second setback the pharmaceutical industry and its allies have faced in court since unleashing a barrage of lawsuits last year against the Medicare drug price negotiation program, which was launched under the Inflation Reduction Act. In late September, a federal judge allowed Medicare to continue implementing the program amid a legal challenge brought by the U.S. Chamber of Commerce and its affiliates.
Earlier this month, the Biden administration made its opening price offers to the manufacturers of 10 high-priced prescription drugs, including Pfizer, Merck, and Johnson & Johnson—each of which is suing over the Medicare program.
The companies now have less than a month to either accept the administration's offer or put forth a counter.
Xavier Becerra, secretary of the Health and Human Services Department, said Monday that the Texas judge's ruling "offers more reason for optimism that our work driving down the cost of prescription drugs will build."
"We will continue to implement the president's historic prescription drug price law, which is already delivering for the American people," said Becerra.
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Big Pharma Vows to Fight Historic FDA Approval of Medicine Imports From Canada
The FDA's decision is "a win for consumers and for Bernie Sanders, who first spearheaded bus trips to Canada 25 years ago," wrote David Sirota, a former Sanders campaign adviser.
Jan 06, 2024
The pharmaceutical lobby pledged Friday to do everything in its power to fight back after the Food and Drug Administration approved a Florida program that will allow the state to import medications from Canada at a steep discount relative to sky-high U.S. prices, which force millions of Americans to skip doses to save money.
"PhRMA is considering all options for preventing this policy from harming patients," Stephen Ubl, the industry trade group's CEO, said in a statement, condemning the FDA's decision as "reckless."
Prescription drug importation from Canada is a broadly popular approach that has long been advocated by Sen. Bernie Sanders (I-Vt.), who more than two decades ago led a caravan of women across the U.S.-Canada border to purchase breast cancer medication. Sanders, then a member of the House, spearheaded a legislative effort to approve more drug imports, but Republicans packed the final bill with loopholes for Big Pharma.
Sanders traveled across the Canadian border again in 2019 with Type 1 diabetes patients looking to buy insulin, which is dangerously pricey in the U.S.
Now, following the FDA's decision on Friday, Republican-led Florida is on track to become the first U.S. state to import cheaper prescription drugs from the country's northern neighbor. The RAND Corporation has estimated that Canadians pay less than half of what Americans pay for brand-name drugs.
The New York Times, which was first to report the FDA's approval, noted that Florida has estimated it "could save up to $150 million in its first year of the program, importing medicines that treat HIV, AIDS, diabetes, hepatitis C, and psychiatric conditions."
"With its approval in hand, Florida has more work to do," the Times added. "Before it can distribute Canadian drugs, the state must send the FDA details on those it plans to import. The state has to ensure that the drugs are potent and not counterfeit. It also must put FDA-approved labels on medications instead of those used in Canada."
At least eight other states—including Maine, Vermont, and Colorado—have implemented laws authorizing a drug importation program and are aiming for a green light from the FDA.
"The FDA is committed to working with states and Indian tribes that seek to develop successful section 804 importation proposals,” FDA Commissioner Robert Califf said in a statement Friday. "These proposals must demonstrate the programs would result in significant cost savings to consumers without adding risk of exposure to unsafe or ineffective drugs."
The powerful pharmaceutical industry, which has spent billions of dollars on lobbying over the past decade, is sure to fight tooth and nail to prevent the widespread adoption of importation programs—as it does with virtually every government effort to rein in drug costs.
David Mitchell, the founder of Patients for Affordable Drugs, wrote Friday that Florida's program "is a reflection of the fact that U.S. prices are too high and Americans need relief."
"But state-by-state importation from Canada isn't workable for all of us," argued Mitchell, a cancer patient who relies on drugs that cost hundreds of thousands of dollars a year. "We need federal solutions that lower prices for everyone."
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Pharma Lobby Furious Over Wildly Popular Effort to Curb Drug Prices
"You know it's good policy when Big Pharma is terrified of it."
Aug 30, 2023
Predictably, the pharmaceutical lobby responded with outrage on Tuesday after the Biden administration took its first, modest step toward directly negotiating the costs of a small selection of high-priced prescription medications—a move that is overwhelmingly popular across the political spectrum.
The CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), the U.S. drug industry's powerful trade group, complained in a statement that the Centers for Medicare and Medicaid Services (CMS) has engaged in a "rushed process focused on short-term political gain rather than what is best for patients," even though the negotiation period for the first 10 drugs is set to last until next August.
Negotiated prices for the medications aren't scheduled to take effect until January 1, 2026.
The lobbying group, which is fighting the drug price negotiation effort in court, also declared that "giving a single government agency the power to arbitrarily set the price of medicines with little accountability, oversight, or input from patients and their doctors will have significant negative consequences long after this administration is gone"—not mentioning that drug companies currently have the virtually unrestrained power to jack up prices thanks to government-granted patent monopolies.
In April, Bristol-Myers Squibb and Pfizer—co-developers of the blood clot medication Eliquis— sued two generic drugmakers for infringing on a patent that's not set to expire until 2031. The two companies have been working together to stave off generic alternatives to Eliquis, which carries a list price of $561 for a 30-day supply, for years.
As Dean Baker of the Center for Economic and Policy Research noted Tuesday: "There are few drugs that are actually expensive to manufacture and distribute. This means that without government-imposed barriers, most drugs would be cheap. Prices of patented drugs fall by 90% or more after enough generics have time to enter the market."
Eliquis, which is used by millions of Americans, is one of the 10 drugs that will soon be subject to direct price negotiations with Medicare. The drug cost Medicare Part D more than $16 billion between June 2022 and May 2023, CMS said.
David Dayen and Maureen Tkacik observed in The American Prospect that "seven of the 10 drugs selected are produced in part or in full by companies that are in active litigation with the government."
"The other three drugs," they added, "are made by Amgen, Novartis, and Novo Nordisk, all members of the Pharmaceutical Research and Manufacturers of America."
The price-negotiation process was set in motion by last year's passage of the Inflation Reduction Act (IRA), which PhRMA spent tens of millions lobbying to defeat. The industry has also worked alongside congressional Republicans to sabotage implementation of the law, which progressives say should be expanded.
"You know it's good policy when Big Pharma is terrified of it," Santiago Mayer, executive director of Voters of Tomorrow, wrote on social media.
In June, PhRMA sued the Biden administration over the impending price negotiations, calling the IRA provisions unconstitutional. The Biden Justice Department moved to dismiss the suit on Monday, calling it "the continuation of a long-running, as-yet-unsuccessful lobbying effort" fueled by "policy objections rather than any concrete injury."
In its lawsuit—one of eight filed by pharmaceutical companies and industry groups in recent weeks—PhRMA rehashed the familiar claim that attempts to regulate drug prices endanger innovation, potentially stifling the development of lifesaving medications.
Stephen Ubl, PhRMA's CEO, echoed that narrative in his statement Tuesday, warning that "the cancer moonshot will not succeed if this administration continues to dismantle the innovation rocket we need to get there."
But advocates and experts have long argued that the pharmaceutical industry dramatically overstates alleged threats to innovation to justify driving up costs to pad their bottom lines.
In a 2021 report, Patients for Affordable Drugs noted that "pharma is a highly profitable industry; there is plenty of room to trim profits while maintaining investment in innovation."
"The money that U.S.-based drug companies make by charging Americans high prices is 76% greater than what's needed to fund their entire global research and development (R&D) expenditures," the report adds. "Pharma wants us to think that drug pricing reform will hurt innovation and new drug development by making the pharmaceutical industry unattractive to investors and impeding investments into R&D. The reality is that even if profits were reduced by billions, the drug industry would still be more profitable than most publicly traded companies."
Alex Lawson, executive director of Social Security Works, said in a statement that the medications listed by the Biden administration on Tuesday "are among the most outrageously priced drugs on the market, pharma's prized cash cows."
"This is just the beginning. Within a decade, Medicare will have the power to negotiate lower prices on well over 100 drugs. That's a huge win for seniors and people with disabilities," Lawson added. "This is the biggest defeat Big Pharma has ever suffered—and it won't be the last. We are going to keep fighting until every single person in America can get the medications they need."
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