The court battle surrounding Medicare’s drug price negotiation program is intensifying as the deadline for determining which drugs will be included approaches. Currently, there are five organizations, including three pharmaceutical companies and two trade groups, that are suing the federal government over the Medicare Drug Price Negotiation Program. This program is an essential component of the Biden administration’s healthcare agenda, and they strongly believe that they have the legal authority to implement it.
Now, let’s delve into the timeline of events regarding this legal battle. President Biden enacted the program almost a year ago when he signed the Inflation Reduction Act into law in August. Since then, the Centers for Medicare & Medicaid Services (CMS) have been preparing for negotiations. They released initial guidance in March, followed by a revised version in response to industry pushback last month. The negotiations are scheduled to take place throughout 2023 and 2024.
In early June, Merck, a prominent pharmaceutical company, became the first entity to challenge the federal government’s negotiation plan, labeling it as a “sham.” Merck’s main concern is the coercive tactics that they believe restrict their options, leaving them with no choice but to agree to the government’s proposed prices. While Merck is not against negotiations, they argue that the current process is unconstitutional.
The announcement of the first ten drugs to be subject to Medicare price negotiation is expected to be made at the beginning of September, and the negotiated prices will come into effect in early 2026.
Now let’s turn our attention to the legal arguments presented in the lawsuits. The Chamber of Commerce, Bristol Myers Squibb, and the Pharmaceutical Research and Manufacturers of America (PhRMA) filed lawsuits against the federal government after Merck. The most recent plaintiff to challenge the negotiation program is Johnson & Johnson. Legal experts suggest that these lawsuits are directly targeted at influencing the Supreme Court. The most frequently cited constitutional amendments are the First and Fifth Amendments. The plaintiffs argue that negotiations compel speech and do not provide just compensation for private property.
The plaintiffs are requesting that the courts deem the process unconstitutional and nullify any manufacturer agreements.
There is a possibility of a delay in the implementation of the Medicare Drug Price Negotiation Program. The Chamber of Commerce has filed a motion requesting a preliminary injunction to block the program, claiming that it would cause irreparable harm to its members. The motion asks for a decision by October 1, which is one month after the announcement of the first ten drugs eligible for negotiation. This could prolong the legal battle, particularly if the cases are heard by the Supreme Court.
Congress has mostly refrained from commenting on the ongoing legal battle. However, Democratic lawmakers like Rep. Frank Pallone, Sen. Patty Murray, and Sen. Ron Wyden have criticized the lawsuits, highlighting the need to prioritize patient well-being over pharmaceutical profits.
As for the first ten drugs that will undergo negotiations, CMS has not disclosed their names. However, a study published in the Journal of Managed Care & Specialty Pharmacy suggests that drugs like Eliquis, Xarelto, Januvia, Jardiance, and Symbicort may be among the first ones chosen based on their age and the Medicare spending on them in 2020. These drugs are used to treat blood clots, type 2 diabetes, asthma, and COPD.
In conclusion, the legal battle over Medicare’s drug price negotiation program is becoming increasingly intense. While the timeline, legal arguments, and potential delay in implementation provide a clearer picture, the final outcome remains uncertain. Congress has mostly stayed out of the fight, allowing the courts to decide the legality of the program. As we wait to hear the announcement of the first ten drugs subject to negotiation, the pharmaceutical industry and the government remain at odds over the constitutionality of the process.
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