DOJ Blasts Industry Attempt To Delay Medicare Drug Price Negotiations

The Department of Justice (DOJ) lambasted the Chamber of Commerce’s request for an injunction to block the Medicare drug price negotiation program, arguing in court filings that the organization had no standing to file the lawsuit and that pausing the program would harm the public.

The rebuttal comes weeks before the federal government is expected to name the first 10 drugs chosen for price negotiation.

The Chamber filed a motion in July for a preliminary injunction against the Medicare Drug Price Negotiation Program, claiming it would inflict “irreparable harm” on U.S. businesses and patients.

The DOJ pushed back, pointing out that companies won’t feel the impact of the negotiated prices until at least 2026 and saying this case could be “fully litigated” by that point.

The department also argued pausing Medicare drug price negotiation would harm the public’s interests.

“The public’s interests would be gravely disserved by acceding to Plaintiffs’ premature efforts to take down the entirety of the Negotiation Program — which achieves a longstanding goal of controlling skyrocketing Medicare spending and making drugs more affordable for seniors — before that program even begins,” the motion read.

When reached for comment, Andrew Varcoe, deputy chief counsel at the U.S. Chamber Litigation Center, said, “We look forward to responding to the Justice Department’s filings.”

The Centers for Medicare and Medicaid Services is set to announce the first 10 drugs eligible for negotiation by Sept. 1. After that, the manufacturers of these drugs will have one month to sign agreements to participate in the negotiations.

Plaintiffs suing the federal government have argued the penalties for not negotiating are too steep, with excise taxes being among the potential consequences. The DOJ argued in its motion that the timeline for negotiations provides companies with “plenty of flexibility.”

Those who don’t wish to negotiate can withdraw from Medicare and Medicaid or divest their interests in the selected drug. Manufacturers can avoid excise taxes if they provide notice at least 30 days before the tax penalties go into effect.

The Chamber of Commerce is one of several organizations, along with the trade group PhRMA, Merck & Co. and Bristol Myers Squibb, suing the Department of Health and Human Services over the negotiation program.

The DOJ argued those suits “should have an opportunity to proceed on their own schedules, without interference from this case.” The department added these recent lawsuits were an attempt to accomplish what lobbying could not.

“Drug manufacturers lobbied hard against legislative efforts to seat the Secretary at the negotiating table. And now that their lobbying failed, manufacturers and interest groups have run to court, filing multiple suits around the country challenging the statute on its face,” read the motion.

The DOJ called into question what standing the Chamber had to sue over the program. While the organization is not a pharmaceutical company or trade group that represents that industry, the Chamber has said it is suing on behalf of its members that are drugmakers and has previously said there is precedent for it to file such a lawsuit.

In the 1977 Supreme Court case Hunt v. Washington State Apple Advertising Commission, the justices found that an organization could sue on behalf of its members if certain criteria were met. The organization would be expected to demonstrate that the issue it’s suing over is integral to the group’s purpose.

The federal government argued that the Chamber had failed to demonstrate “Article III standing,” which is proof that a party has a genuine stake in the outcome of the case due to suffering harm from the opposing party’s actions.

According to the DOJ’s motion, the only member of the Chamber of Commerce who could argue harm would be the U.S. pharmaceutical company AbbVie.

The DOJ emphasized the voluntary nature of the negotiation program repeatedly throughout the motion. Even if companies would lose out on the lucrative income brought in through Medicare, the government argued that this risk in itself is not a form of compulsion forcing companies to participate.


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