US government and patient groups fight back at lawsuits aimed at blocking drug price negotiation provisions of the Inflation Reduction Act

Written by Joanne Walker
Health equity Health policy Market access News Patient engagement Stakeholder engagement Value assessment
Drug Price Negotiation Program

Department of Health and Human Services files motion in US court to dismiss one of the six lawsuits challenging the Inflation Reduction Act (IRA) with support announced by a coalition of patient and consumer groups. 

Despite vowing to benefit patients through lower drug prices, the IRA has been met with significant concern towards the extent to which it will influence future drug development. As a result, several lawsuits have been filed against the US government aiming to block implementation of the drug pricing provisions in the IRA. Last week, the Department of Health and Human Services (HHS) took its first step to overturn these lawsuits by filing a motion to dismiss the suit and preliminary injunction made by the US Chamber of Commerce. The court filings come just days after the first anniversary of the signing of the IRA and just ahead of when Centers for Medicare & Medicaid Services (CMS) is expected to announce the first ten Medicare Part D drugs to be subject to price negotiation in 2026. 

In June, the US Chamber of Commerce joined several pharmaceutical companies as well as PhRMA in suing HHS and CMS, arguing the government’s price control scheme is ‘unconstitutional’ that violates the First, Fifth, and Eighth Amendments. This was swiftly followed in July by motion for a preliminary injunction to prevent any further implementation of the Medicare Drug Price Negotiation program; the decision to proceed with this motion is due for review later in August.  

In the motion, HHS lawyers defend the need for Medicare drug pricing reform stating the ‘shift of financial burden to the Medicare program… undermines the program’s premise of leveraging market competition to reduce prices for beneficiaries and taxpayers’. 

“This status quo is unsustainable; the IRA seeks to correct course.” 

They go on to state the US Chamber of Commerce had no standing to file the lawsuit and their premise for their lawsuit ‘lack merit’. Amongst the several reasons given to dismiss the lawsuit, they question what ‘standing’ the Chamber had to sue over the program and also ascertain that companies would not see the impact of price negotiations until 2026 so financial injury would not be imminent and could be compensated for. Whilst recognizing that there is uncertainty surrounding which Medicare Part D drugs will be selected first, the lawyers speculate the ceiling price (the maximum CMS is willing to pay) could be equivalent to the negotiated maximum fair price so that companies could, “agree to prices that result in flat or even greater revenue for them.” 

“In those circumstances, manufacturers will not be any worse off – though Medicare beneficiaries and taxpayers will still be better off, as Congress intended.” 

They also point out the voluntary nature of participation in the Medicare program in that, “like other market systems, the Negotiation Program thus gives a manufacturer a choice: it can sell its wares at prices a buyer is willing to pay, or it can take its business elsewhere.” 

Backing from patients and consumer organizations 

Announced separately on August 16, 2022, several patients and consumer groups, including Public Citizen, Patients for Affordable Drugs Now, Protect Our Care, Families USA, and Doctors for America, have collaboratively filed an ‘amicus brief’ supporting the HHS motion to deny US Chamber of Commerce’s preliminary injunction to stop the IRA. In addition, more than 70 organizations, led by Public Citizen, have sent a letter compelling the companies to drop their ‘unconscionable’ lawsuits. 

Robert Weissman, President of Public Citizen called the lawsuits ‘a disgrace’, with Merith Basey, Executive Director of Patients For Affordable Drugs Now explaining that the ‘will of the people’ is on their side, with over 80% of people supporting direct Medicare negotiation.  

“It’s Big Pharma and Big Business versus patients and consumers,” Basey said, “The truth is, implementation of Medicare negotiation is a desperately needed and long-awaited step to ensure millions of Americans obtain the medications they need at prices they can afford.” 

Leslie Dach, Chair of Protect Our Care echoed these sentiments, “The American people will suffer if drug companies get their way.”  

Meg Jones Monteiro, Senior Director for Health Equity at ICCR, called on companies to, “truly put patients and society first.” 

“The inappropriate use of corporate resources and misuse of the US legal system to file this lawsuit against HHS is not what we would expect from companies espousing a commitment to putting patients first and to increasing access and affordability.”

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