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Federal Judge Dismisses Challenge to Medicare's New Drug Price Negotiation Program

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Medriva Correspondents
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Federal Judge Dismisses Challenge to Medicare's New Drug Price Negotiation Program

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A federal judge in Texas has dismissed the first lawsuit against the new Medicare prescription-drug negotiation program. This decision, based on a technicality, marks a significant victory for the Biden administration's efforts to lower drug prices. However, the pharmaceutical industry is preparing to file additional lawsuits, indicating that the battle over drug prices in the United States is far from over.

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Medicare's New Drug Price Negotiation Program

The Biden administration's plan aims to cut prescription drug prices and enable the federal government to negotiate drug prices in Medicare. This comprehensive plan permits drug importation from Canada, restricts the ability of drug companies to raise prices on existing drugs, and imposes a cap on out-of-pocket spending for the Medicare prescription drug benefit. The judge dismissed the PhRMA lawsuit on the grounds that the National Infusion Center Association, the only party located in Texas, lacked standing to sue. The White House has expressed their appreciation of the court's decision, viewing it as an important step in defending the law and proceeding with their work to negotiate for lower drug prices.

PhRMA Lawsuit and It's Repercussions

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The lawsuit, filed by the Pharmaceutical Research and Manufacturers of America (PhRMA), sought to prevent the implementation of IRA pricing provisions and block the government from enforcing an excise tax on constitutional grounds. However, the judge ruled that the plaintiffs failed to demonstrate that bringing their constitutional challenge through administrative channels was impractical or faced a 'serious practical roadblock.' The White House applauded this decision and stated that CMS is moving forward with negotiating lower drug prices for the first 10 drugs selected for the program.

Pharma Industry's Response

The pharma industry has lodged several cases challenging the IRA law in various legal venues, raising the possibility of implementation delays. Despite this, the Biden administration made its opening price offers to manufacturers of high-priced prescription drugs, granting them less than a month to accept or counter the offers. The Pharmaceutical Research and Manufacturers of America has opposed the law and filed lawsuits against the Biden administration, but the White House has defended the law as a critical step in negotiating for lower drug prices for seniors.

Looking Ahead

The ability to allow Medicare to negotiate drug prices was included in the Inflation Reduction Act passed by Congress in 2022, which also sets a $2,000 price cap on out-of-pocket drug expenses for Medicare Part D enrollees. The dismissal of the lawsuit leaves eight pending litigations challenging the Drug Price Negotiation Program of the Inflation Reduction Act (IRA). However, this ruling marks a key milestone in the ongoing debate over healthcare and drug pricing in the United States. As Congress approaches a funding deadline, expectations are high that the next funding bill will reverse the Medicare pay cut implemented in January.

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