Pharmaceutical companies and House Republicans have come together to launch a comprehensive and aggressive assault on President Joe Biden’s new Medicare drug reforms. These reforms, which have already begun to lower prescription costs for seniors, are considered to be one of Biden’s major accomplishments. However, the pharmaceutical industry and House Republicans argue that these reforms will hinder investment in research and development, leading to a decrease in breakthrough cures.
On Wednesday, industry trade group PhRMA filed a lawsuit challenging one specific aspect of the new prescription drug initiative. They claim that this aspect, which allows the federal government to negotiate the price of certain drugs in Medicare, violates the Constitution in multiple ways. While seniors won’t see the effects of these lowered prices until 2026, PhRMA wants the courts to intervene before the negotiation process begins in September.
PhRMA filed the lawsuit in collaboration with two advocacy groups, the National Infusion Center Association and the Global Colon Cancer Association, both of which have drugmakers among their corporate supporters. Senate Finance Chairman Ron Wyden quickly denounced the lawsuit, stating that it is an attempt by the pharmaceutical industry to prioritize profits over the affordability of medication for seniors who are already burdened with the highest drug prices in the world.
PhRMA’s lawsuit is just one of four major legal challenges to the new law. Merck and Bristol Myers Squibb, two major drug manufacturers, have also filed lawsuits, along with the U.S. Chamber of Commerce. While the lawsuits have different specific arguments, they all claim that the new initiative goes beyond Congress’ authority and infringes on the rights of manufacturers.
Legal experts, however, have suggested that the industry’s claims are weak. They argue that drug manufacturers have the option to withdraw from Medicare if they are unhappy with the negotiated prices. The outcome of the lawsuit will ultimately depend on how individual jurists interpret the Constitution and past precedent.
In addition to the legal challenges, House Republicans have called for the repeal of all the new Medicare pharmaceutical reforms. This would eliminate not only the negotiated prices but also other provisions such as a cap on insulin prices and penalties on manufacturers who raise prices faster than inflation. Both the pharmaceutical industry and Republicans argue that price negotiation will reduce drug company profits and hinder innovation.
Opponents of the new reforms have cited a study funded by the industry that claims only a fraction of recent breakthrough drugs would have come to market under the new policies. However, many experts believe that these concerns about depressed innovation are unfounded. The Congressional Budget Office has predicted that the reforms will have minimal impact on total drug output, and recent legislation increasing the federal government’s support for basic scientific research could actually lead to more breakthroughs.
The battle over the new prescription drug reforms is reminiscent of past fights over major healthcare programs such as Medicare, Medicaid, and the Affordable Care Act. These programs faced continuous attacks and legal challenges, but ultimately survived due to strong advocacy and defense. The survival of the new reforms may depend on a similarly effective defense in the face of this existential threat.
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