US District Court Austin, Texas
PhRMA filed suit in federal district court in Austin, Texas, to strike down legislation letting Medicare negotiate some drug prices.

PhRMA and Bristol Myers Squibb Sue Separately To Stop Medicare Drug Price Negotiation

Drug industry trade group Pharmaceutical Research and Manufacturers of America and drug manufacturer Bristol Myers Squibb have filed separate federal lawsuits to stop Medicare from negotiating the prices of some drugs, charging that it would impose unconstitutional price controls on manufacturers and stifle drug innovation.

On Wednesday, PhRMA, the provider group National Infusion Center Association, and patient organization Global Colon Cancer Association filed a lawsuit in federal district court in Texas. PhRMA donated to both in 2021, the most recent year for which such information is available.

BMS filed suit on June 16 in federal district court in New Jersey.

The lawsuits join legal challenges to the new Medicare drug price negotiation program filed on June 9 by the U.S. Chamber of Commerce and state affiliates and by drug manufacturer Merck on June 6.

The lawsuits ask the courts to declare unconstitutional provisions of the Inflation Reduction Act that let the Centers for Medicare & Medicaid Services negotiate “maximum fair prices” (MFPs) for some expensive, single-source drugs. The law requires that 340B covered entities have access to a drug’s MFP if the drug’s 340B ceiling price is higher. Guidance to implement that requirement has not been issued yet. MFPs on the first 10 drugs picked for negotiation are due to be applicable starting Jan. 1, 2024.

“The price setting scheme in the Inflation Reduction Act is bad policy that threatens continued research and development and patients’ access to medicines,” PhRMA President and CEO Stephen Ubl said in a new release Wednesday. “It also violates the U.S. Constitution because it includes barriers to transparency and accountability, hands the executive branch unfettered discretion to set the price of medicines in Medicare and relies on an absurd enforcement mechanism to force compliance.”

“Since the IRA’s inception, we have expressed serious concerns about the impact this program will have on research and development and future innovation that can help patients prevail over serious disease,” BMS said in a June 16 news release. “It has already changed the way we look at our development programs in oncology and beyond, whether it’s a decision to advance a new medicine or pursue additional indications for an existing one.” 

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