The U.S. Chamber of Commerce, known as one of the largest lobbying groups in the country, has taken legal action to prevent the implementation of the Medicare Drug Price Negotiation program, established by the Inflation Reduction Act (IRA). This program has been met with numerous legal challenges, and the Chamber filed a lawsuit last month asserting that it violated several constitutional amendments. Other entities within the drug industry, including PhRMA, Merck & Co., and Bristol Myers Squibb, have also filed similar lawsuits. Although these lawsuits are not believed to be coordinated, the organizations involved likely share a desire to halt the program before negotiations proceed too far. Negotiations are scheduled to occur between 2023 and 2024, with the first 10 drugs eligible for price negotiation set to be announced in September. The Chamber is now seeking to prevent the program’s implementation altogether while the legal debate continues.
In a statement, Andrew Varcoe, the deputy chief counsel at the U.S. Chamber Litigation Center, emphasized the potential harm the program could cause to U.S. businesses and patients, limiting access to medicine, impeding investment, and stifling innovation. While the Chamber itself is not a drug manufacturer, it is representing its industry members in the lawsuit, asserting that an injunction is essential to prevent irreparable harm.
One common grievance in the lawsuits against the program is the claim that it grants the Department of Health and Human Services (HHS) excessive, unchecked power and effectively coerces drugmakers into compliance by threatening them with excise taxes or negative publicity. However, legal experts note that participation in the program is voluntary, and companies have the freedom to disengage from negotiations if they so choose.
In response to the lawsuits, the Biden administration recently revised the drug negotiation program to clarify its execution and selection process for drugs to be negotiated. Companies are now able to terminate their relationship with Medicare and avoid the excise tax by providing proper notice to the government.
The revisions have not been well-received by the plaintiffs in the case, with PhRMA stating that they offer very few significant changes.
Though the specific drugs to be negotiated have not yet been disclosed, data suggests that the potential savings from the program could be substantial. A recent analysis by the Congressional Budget Office estimated that the program could reduce the budget deficit by $25 billion in 2031.
Furthermore, a study from the KFF found that the 10 top-selling prescription drugs under Medicare Part D accounted for only one percent of all covered drugs in 2021 but represented 22 percent ($48 billion) of total gross Medicare Part D drug spending. These top-selling drugs were all brand-name products. The KFF emphasized that even a small number of drugs can significantly impact Medicare spending.
In conclusion, the legal battle surrounding the Medicare Drug Price Negotiation program continues, with the Chamber of Commerce and various industry entities seeking to block its implementation. The program’s potential impact on drug pricing and Medicare spending is a matter of ongoing debate and scrutiny.
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