Watchdog Calls On Judge With Pharma Investments to Recuse From Drug Pricing Case
"Any chance that Judge Rose evaluates this case in his own personal financial interest, rather than by the letter of the law, is a significant threat to judicial ethics."
Update:
U.S. District Court Judge Thomas Rose on Friday withdrew from a case aimed at blocking Medicare from negotiating drug prices directly with pharmaceutical companies after the Revolving Door Project highlighted his ownership of stock in Johnson & Johnson and AstraZeneca.
Two drugs made by the companies are on the initial list of medications that will be subject to price negotiations with Medicare.
Earlier:
A federal judge who owns stock in Johnson & Johnson, Moderna, and AstraZeneca is set to preside over corporate lobbying groups' case against allowing Medicare to negotiate medicine prices directly with drugmakers.
The stock positions of Thomas Rose—a George W. Bush-appointed senior judge on the U.S. District Court for the Southern District of Ohio—were highlighted by Revolving Door Project (RDP) researchers earlier this week as the Biden administration named the first 10 drugs that will be subject to direct price negotiations with Medicare.
On Friday, RDP called on Rose to recuse himself from Dayton Area Chamber of Commerce v. Becerra, a case that poses a threat to the Biden administration's popular effort to curb drug costs and rein in Big Pharma's price-setting power. The Ohio Chamber of Commerce, Michigan Chamber of Commerce, and U.S. Chamber of Commerce are also plaintiffs in the case.
"The Chamber of Commerce's case against the Inflation Reduction Act, should it succeed, could immediately halt the progress on prescription drug prices that the IRA has been working towards for the past year," Ananya Kalahasti, a research assistant at RDP, said Friday. "In a case as high-stakes as this, any chance that Judge Rose evaluates this case in his own personal financial interest, rather than by the letter of the law, is a significant threat to judicial ethics."
In a letter to Rose, the Revolving Door Project argued that the judge could be in violation of the official Code of Conduct for U.S. judges if he oversees the price-negotiation case while having holdings in Johnson & Johnson and AstraZeneca.
Johnson & Johnson's blood clot medication Xarelto and AstraZeneca's Type 2 diabetes drug Farxiga are on the Biden administration's initial list of drugs set to face price negotiations with Medicare. The companies charge far higher prices in the U.S. for those medications than in other countries.
"Canon 2 of the Code of Conduct states, 'A Judge Should Avoid Impropriety and the Appearance of Impropriety in All Activities,' acknowledging that even the appearance of improper incentives that could influence a judge's decisionmaking can be deeply harmful for public trust in government," RDP noted in its letter. "Your most recent financial disclosure reports show that you hold $15,001 to $50,000 of stock in Johnson & Johnson, $15,001 to $50,000 of stock in Moderna, and $1 to $15,000 of stock in AstraZeneca."
"Holding stock in two companies that will be subject to the first round of price negotiations while presiding over a case which may result in the prevention or delay of those negotiations is clearly an instance in which the judge has an 'interest that could be affected substantially by the outcome of the proceeding,'" RDP added, quoting from Canon 3 of the Code of Conduct. "Given the ethics concerns that your apparent conflict of financial interests in the pharmaceutical industry raise, we call on you to recuse yourself from Dayton Area Chamber of Commerce et al. v. Becerra et al. immediately."
Filed in July, the Dayton Area Chamber of Commerce's lawsuit is part of a broader legal campaign by industry groups and pharmaceutical giants to prevent Medicare from negotiating drug prices, something it was previously barred from doing under federal law.
Pharmaceutical companies and industry groups have thus far filed a total of eight lawsuits over the impending price negotiations, which are slated to begin for the first batch of drugs later this year and end in August 2024.
"Long-standing legal precedent is no obstacle for this billionaire-friendly Supreme Court, and it seems that given its choice of representation, Big Pharma is prepared for the cases to get that far."
As Bloomberg Lawsummarized, the legal challenges "make various constitutional claims, including that the negotiation process violates the Fifth Amendment's prohibition on taking private property without just compensation and the Eighth Amendment's excessive fines clause, based on the excise tax pharmaceutical companies face if they refuse to comply with the negotiations."
Nicholas Bagley, a professor at the University of Michigan Law School, told Bloomberg Law that "the drug companies are throwing spaghetti at the wall, and they're going to hope that some of it sticks."
Bagley argued that the IRA's corporate opponents are "really facing an uphill challenge, because there's an act of Congress that establishes this program."
But Kalahasti and RDP research intern Will Royce stressed in The American Prospect earlier this week that some legal experts have been "quick to point out that long-standing legal precedent is no obstacle for this billionaire-friendly Supreme Court, and it seems that given its choice of representation, Big Pharma is prepared for the cases to get that far."
"Who is helping Big Pharma in the courts? In Merck and Bristol Myers' respective cases, it's the conservative law firm Jones Day, which famously represented both Trump campaigns, supplied many Trump administration officials, and had a hand in Trump's Supreme Court nominations," Kalahasti and Royce observed. "On the case for both companies is Yaakov Roth, who successfully argued for the gutting of the administrative state in West Virginia v. EPA."