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Photo: John Smith/VIEWpress

Pfizer cannot directly or indirectly pay out-of-pocket costs for Medicare patients to get the company's $225,000-a-year heart drug because doing so would violate federal kickback law, a U.S. district judge ruled Thursday.

Why it matters: The ruling in this closely-watched case means pharmaceutical companies still cannot cover the copays and other costs of their drugs for patients who are enrolled in government insurance programs because it would be viewed as an illegal inducement.

The big picture: Medicare is prohibited from setting drug prices, although Democrats are attempting to change that, so the federal program uses cost-sharing as a check on prices.

  • Pfizer argued the out-of-pocket costs are preventing Medicare patients from getting a drug they need. The drugs in question, Vyndaqel and Vyndamax, also known as tafamidis, treat a rare form of heart failure that mostly occurs in older people who are on Medicare.
  • Federal attorneys and auditors said Pfizer "priced itself out of the market" by listing the drug at $225,000. They also warned a ruling in Pfizer's favor would lead to a "gold rush" of other pharmaceutical companies paying patients' copays for their drugs while getting guaranteed reimbursement from Medicare at almost any price they set.

What they're saying: Legal experts said the ruling is unsurprising because federal law clearly does not allow drug makers to induce people on Medicare to take their drugs, either by directly paying their copays or by indirectly funding a charity and telling the charity to pay those copays.

  • Pfizer sent a statement, saying: "We are disappointed in the ruling and believe that providing copay assistance to patients who have been prescribed tafamidis through Medicare Part D represents an equitable way to lower out-of-pocket costs for this breakthrough treatment."

The bottom line: "While there may be an administrative or legislative remedy to the problems Pfizer seeks to correct here, the remedy does not lie with the court," Judge Mary Kay Vyskocil wrote in her ruling.

Go deeper

Focus group: Child tax credit expansion divides swing voters

Photo by Chip Somodevilla/Getty Images

Some swing voters say the most important elements to preserve in Democrats' massive social spending package are the ones that would lower prescription drug costs, reduce pollution and make childcare or pre-K free or more affordable.

Yes, but: Considerably less popular among Trump-to-Biden voters: Extending the expanded child tax credit to 2025.

3 mins ago - Sports

Where it stands: Weed policies by U.S. sports league

Illustration: Sarah Grillo/Axios

With public support for marijuana legalization nearing unanimity, and more athletes using cannabis to treat pain, the four major U.S. sports leagues continue to reduce restrictions and punishments.

Driving the news: NBA players won't be subject to random marijuana testing this season, an extension of an agreement between the league and its players' union that began ahead of the 2020 Orlando restart.

3 hours ago - World

Scoop: Jake Sullivan discussed Saudi-Israel normalization with MBS

Photo illustration: Sarah Grillo/Axios. Photo: Jim Lo Scalzo/EPA/Bloomberg and Michael Brochstein/SOPA Images/LightRocket via Getty Images

White House national security adviser Jake Sullivan raised normalization with Israel during his recent meeting with Saudi Crown Prince Mohammed bin Salman, three U.S. and Arab sources tell Axios.

Why it matters: Saudi Arabia would be the biggest regional player to sign onto the "Abraham Accords" peace agreement with Israel, and such a major breakthrough would likely convince other Arab and Muslim countries to follow suit.