Feb 12, 2024 - Health

Judge dismisses PhRMA challenge to Medicare drug negotiations

Illustration of a pen crossing out the "X" in the prescription symbol.

Illustration: Shoshana Gordon/Axios

A federal judge in Texas on Monday dismissed a drug industry trade group's legal challenge to halt Medicare drug price negotiations, ruling it lacked standing.

Why it matters: It's the first time a court has thrown out a lawsuit to overturn the talks required by the Inflation Reduction Act, which began earlier this month.

  • Eight other lawsuits brought by manufacturers and other plaintiffs are still pending.

Details: Judge David Alan Ezra granted a Biden administration motion to dismiss the challenge from the Pharmaceutical Research and Manufacturers of America in the U.S. District Court for the Western District of Texas.

  • PhRMA, joined by the National Infusion Center Association and the Global Colon Cancer Association, sued in June, claiming that the IRA delegated too much power to the Health and Human Services Department and violated drug companies' due process.
  • The Justice Department countered that NICA, the only plaintiff based in Texas, lacked standing because it doesn't make or sell prescription drugs that could be subject to the negotiations.

What they're saying: "We are disappointed with the court's decision, which does not address the merits of our lawsuit, and we are weighing our next legal steps," PhRMA spokesperson Nicole Longo said in a statement to Axios.

What's next: PhRMA could appeal to the 5th U.S. Circuit Court of Appeals.

  • But if it prevailed, the trade group would likely have to go back to the district court to litigate its arguments, said Zachary Baron, director of the Health Policy and the Law Initiative at Georgetown University's O'Neill Institute.
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