Judge recuses herself from Medicare drug price case following disclosure of stock ownership

A federal judge voluntarily recused himself from a case with potential implications on Medicare’s ability to negotiate drug prices. This decision came shortly after a non-profit watchdog group exposed his ownership of stocks in two pharmaceutical companies that would be directly affected by the new program.

Judge Thomas M. Rose, who presided over the U.S. District Court for the Southern District of Ohio, withdrew from the case on the same day that the Revolving Door Project sent him a letter expressing concerns about his ownership of stocks in Johnson & Johnson and AstraZeneca.

The Revolving Door Project urged Judge Rose to recuse himself due to ethical concerns posed by his financial interests in the pharmaceutical industry. Johnson & Johnson’s blood thinner Xarelto and AstraZeneca’s Type 2 diabetes drug Farxiga were among the 10 drugs subject to price negotiations according to the Biden administration’s recently unveiled list.

According to his 2022 financial disclosure form, Judge Rose owns between $15,000 and $50,000 worth of Johnson & Johnson stock and shares in AstraZeneca worth up to $15,000. He also holds stock in Moderna valued between $15,000 and $50,000.

Prior to his recusal, Judge Rose was presiding over a lawsuit brought by the U.S. Chamber of Commerce against the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS). The Chamber sought a ruling declaring Medicare’s ability to negotiate drug prices as unconstitutional.

Various pharmaceutical companies, including Merck, Bristol Myers Squibb, Johnson & Johnson, Boehringer Ingelheim, AstraZeneca, and the drugmaker lobby PhRMA, have filed lawsuits in different district courts in an attempt to challenge Medicare’s new powers. Legal experts believe that the drugmakers are strategically spreading their complaints across the country to increase the chances of the litigation reaching the Supreme Court.

Merck CEO Robert Davis confirmed during an earnings call that the company intends to pursue its lawsuit all the way to the Supreme Court. Davis stated, “As we look forward, we’re going to take this to the fullest, which means we’ll take it through District Court and, if need be, into Circuit Court and ultimately to the Supreme Court. So, really that’s the strategy.”

The U.S. Chamber of Commerce had requested Judge Rose to block the program by October 1, the deadline for drugmakers to participate in the negotiations.