A Texas judge dismissed a lawsuit seeking to challenge the government’s drug price negotiation power on constitutional grounds over a procedural failure.
Although it’s the first time it’s happened, the decision marks the latest political setback for the Pharmaceutical Research and Manufacturers of America (PhRMA) at the hands of the Biden administration.
Senior US District Judge David Alan Ezra recently dismissed the three plaintiffs’ claim against the Department of Health and Human Services (HHS), the Centers for Medicare and Medicaid Services (CMS) and their respective directors.
“We are disappointed with the court’s decision, which does not address the merits of our lawsuit, and are weighing our next legal steps,” said Nicole Longo, PhRMA spokeswoman.
It comes two weeks after CMS sent initial price offers for the first 10 drugs selected under the price negotiation program, a major component of the Inflation Reduction Act (IRA) of 2022. Manufacturers of these therapies have 30 days to respond and an expected end. The announcement of the pricing decision will be made in September.
PhRMA had teamed up with two patient groups — the Global Colon Cancer Association (GCCA) and the National Infusion Center Association (NICA) — to file their lawsuit last summer. Only one of them, NICA, is based in Texas, where the case was filed.
The trio asked the court to prevent HHS from implementing the IRA’s pricing provisions and to block the government from enforcing an excise tax, both on constitutional grounds. They alleged multiple violations, from the Constitution’s separation of powers principle and due process clause to the Eighth Amendment’s prohibition on “excessive” fines.
Because the claim falls under the auspices of the Medicare Act, the plaintiffs would have had to show that bringing it administratively was impossible or faced a “serious practical obstacle,” Judge Ezra explained in his motion of 14 pages to dismiss.
The plaintiffs, however, fell short. They were not prevented from filing their constitutional challenge through so-called administrative review, he ruled. An exception could have made it possible to circumvent judicial or administrative review, but they did not overcome this obstacle either.
“There are established avenues for administrative review of constitutional challenges to the IRA and refund requests,” the judge noted.
With NICA’s claim dismissed, and none of the other Texas-based plaintiffs, the court decided to dismiss the entire case for “improper venue.”
“Big PhRMA is so desperate to stop the Biden administration from lowering drug costs for seniors that they are clogging up the court system with spam lawsuits even in courtrooms where they have no jurisdiction,” he read a statement from Accountable.US, a group that accounts. as a non-partisan government watchdog.
Unsurprisingly, the White House also applauded the decision.
“Despite Big Pharma’s attempts to block the trading of prescription drugs, [CMS] is moving forward with its critical work to negotiate lower drug prices for the first 10 drugs selected for the bargaining program,” White House press secretary Karine Jean-Pierre said.
The bargaining program is expected to save $25 billion a year by 2031 and imposes a tax on those companies that refuse to participate unless they withdraw from Medicare entirely. The program will take effect in 2026, pending further legal challenges.
The pharmaceutical industry has mounted 10 such cases, from Merck in the District of Columbia and AstraZeneca in Delaware to the US Chamber of Commerce in Ohio, with several awaiting a decision. Taking IRA cases in different legal arenas increases the chances that enforcement will be delayed, legal experts have said.
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