Judge denies request to block; find out the latest update

A federal judge on Friday denied a preliminary injunction sought by the Chamber of Commerce, one of the largest lobbying groups in the country, which aimed to block the Biden administration from implementing Medicare drug price negotiations. The judge’s ruling upholds the controversial process that seeks to make expensive medications more affordable for older Americans.

Judge Michael Newman of the Southern District of Ohio issued the ruling, allowing the Biden administration to proceed with the price talks before the October 1 deadline for the first 10 selected drugs. However, the judge also requested the Chamber of Commerce to amend its complaint by October 13 to provide further clarity in the case. The Biden administration has until October 27 to renew its motion to dismiss the case entirely.

The ruling from Judge Newman is a significant setback for the pharmaceutical industry, which sees the negotiation process as a threat to its revenue growth, profits, and drug innovation. The industry has filed multiple lawsuits challenging the constitutionality of the negotiations, but the Chamber of Commerce’s suit was the only one seeking a preliminary injunction.

The Chamber’s lawsuit claims that the Medicare drug price negotiations violate the due process rights of drugmakers under the Fifth Amendment. The Chamber argues that when the government sets prices, it must provide procedural safeguards to ensure fair rates and returns on investment. The Chamber referred to the 2001 case Michigan Bell Telephone Co. v. Engler as the precedent for this argument.

According to the Chamber, the Medicare negotiations fail to provide these safeguards and impose price caps significantly below the market value of drugs. The Chamber’s attorney, Jeffrey Bucholtz, expressed concerns during a hearing that this system may result in unfair prices. He also stated that drugmakers face the choice of accepting the government-set prices or incurring an excise tax of up to 1,900% of U.S. sales of the drug.

However, the Department of Justice argued during the hearing that drugmakers have an alternative option: withdrawing their voluntary participation in the Medicare and Medicaid programs. Attorney Brian Netter highlighted that the relief sought by the Chamber is essentially a decision for manufacturers on whether to continue participating in the program. The other lawsuits challenging the negotiations are ongoing in various federal courts across the country.

The drug price talks are expected to save the Medicare insurance program approximately $98.5 billion over the next decade, according to the Congressional Budget Office. President Joe Biden’s Inflation Reduction Act grants Medicare the authority to directly negotiate drug prices with manufacturers for the first time in the program’s history, covering around 66 million individuals in the United States.

In August, the Biden administration announced the first 10 drugs that will undergo price negotiations, initiating a lengthy process set to conclude in August 2024. However, the reduced prices for these medications will not take effect until January 2026. The initial drugs include blood thinners from Bristol-Myers Squibb and Johnson & Johnson, diabetes drugs from Merck and AstraZeneca, and a blood cancer drug from AbbVie.