PhRMA sues over Medicare drug pricing provisions
Pharmaceutical Research and Manufacturers of America announced Wednesday it is suing the Biden administration over its signature measure to lower drug prices, calling it unconstitutional.
Why it matters: The move is an escalation in the pharmaceutical industry's battle against the law, which allows Medicare to negotiate prices on some drugs, and could be a hurdle for the provisions implementing lower drug prices from going into effect.
What they're saying: "This is not negotiation," PhRMA CEO Steve Ubl told reporters, saying the provisions are so burdensome they are actually just "price-setting" and put "access to innovative medicines at risk."
Driving the news: The lawsuit argues the law is unconstitutional on several grounds:
- It's a violation of separation of powers by delegating too much authority to the Department of Health and Human Services.
- It violates due process by denying drug companies input into the process.
- It violates the Eighth Amendment's ban on "excessive" fines, given the heavy excise tax companies have to pay if they refuse to negotiate.
- Axios has reached out to the White House and HHS for comment and will update this story if they respond.
Between the lines: The lawsuit was filed in the Western District of Texas, where PhRMA's partner in the lawsuit, the National Infusion Center Association, is located. The Global Colon Cancer Association also joined.
- The suit follows other legal challenges, including from Merck and Bristol Myers Squibb.
- The White House pushed back on the Merck suit earlier this month by saying "there is nothing in the Constitution that prevents Medicare from negotiating lower drug prices.”
- PhRMA is seeking to have a court require more input in the negotiation process and to prevent enforcement of the excise tax penalty.