PhRMA joins legal battle against Medicare drug pricing provisions in the Inflation Reduction Act

PhRMA, along with National Infusion Center Association and the Global Colon Cancer Association, claim the drug pricing provisions in the Inflation Reduction Act are ‘unconstitutional’.

It seems like not a week (or even day) goes by lately without The Evidence Base covering news related to the Inflation Reduction Act (IRA): earlier this week we covered reports by Vital Transformation estimating the negative impact of implementing Medicare Part B and Part D drug pricing policies on the US healthcare ecosystem; and now news has come out about further legal challenges to the proposed policies under the IRA that mandate government-set prices for medicines covered by Medicare.

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To learn more about the Inflation Reduction Act, read our interview ‘Impact of the Inflation Reduction Act on US health care: an interview with Corey Ford and Kimberly Westrich, Xcenda’ here >>>

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In a joint statement, the National Infusion Center Association (NICA), the Global Colon Cancer Association (GCCA) and the Pharmaceutical Research and Manufacturers of America (PhRMA) have announced they have filed a suit in the US District Court for the Western District of Texas, with violation of the Eighth Amendment listed amongst several grounds for legal action. This new filing joins three other suits recently made, first by Merck and swiftly followed by Bristol-Myers Squibb and the US Chamber of Commerce.

PhRMA represents the country’s leading innovative biopharmaceutical research companies, including Astellas, Eli Lilly, Novartis and Pfizer. In their suit with NICE and GCCA, they declare the Drug Price Negotiation Program to be a ‘government mandate disguised as negotiation’ and ‘unconstitutional’ based on three primary reasons. Firstly, the Medicare drug pricing scheme violates the Constitution’s separation of powers principles by giving the Department of Health and Human Services (HHS) too much authority to set prices. Secondly it goes against the due process of law stipulated in the Fifth Amendment and denies ‘manufacturers, providers, and patients the right both to front-end input on how the Program will be implemented and to back-end judicial or administrative review after critical implementation decisions have been made.’ Finally, the excise tax imposed on manufacturers who do not agree to negotiate with the government is excessive and violates the Eighth Amendment’s Excessive Fines Clause.

PhRMA President and CEO Stephen J Ubl said:

“The price setting scheme in the Inflation Reduction Act is bad policy that … violates the US 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.”

Like many others, PhRMA, NICA and GCCA all cite the devastating affect upholding IRA’s provisions would have, claiming it ‘upends this time-tested, market-based system for encouraging innovation.’ Ubl declared that the IRA, “threatens continued research and development and patients’ access to medicines.” Whilst Andrew Spiegel, GCCA Executive Director, said, “The price setting provisions in the IRA thwart the progress we have made and lead to less hope for patients battling this disease [colorectal cancer].” Brian Nyquist, NICA Chief Executive Officer, continued by saying that, “litigation was our only option to protect our members from the unintended consequences of the Inflation Reduction Act and to preserve access to community-based infusion centers.”