Activists protest the price of prescription drug costs in front of the U.S. Department of Health and Human Services constructing in Washington, D.C., on Oct. 6, 2022.
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Good morning! The bitter legal battle over Medicare drug price negotiations is heating up – and up to now, it’s looking favorable for the Biden administration.
So, what’s this fight all about in the primary place? It centers around a key provision of President Joe Biden’s Inflation Reduction Act that offers Medicare the ability to barter prices for costly prescription medicines. The talks aim to make those drugs cheaper for seniors, and can likely take a bite out of pharmaceutical industry profits.
The Biden administration faces a flurry of lawsuits from drugmakers with medicines chosen for the primary round of talks. The ultimate negotiated prices of the initial 10 drugs will go into effect in 2026.
The lawsuits argue the price talks are unconstitutional and should be struck down.
A number of the drugmakers specifically contend the negotiations would force them to sell medicines at huge discounts, below market rates, amongst other arguments. They assert that this violates due process under the Fifth Amendment, which requires the federal government to pay reasonable compensation for personal property taken for public use.
However the administration has already clinched just a few early wins in among the cases.
- AstraZeneca: A federal judge in Delaware earlier this month rejected the drugmaker’s lawsuit. That judge said AstraZeneca’s due process claim “fails as a matter of law,” noting that the corporate is not entitled to sell its drugs to the federal government “at any price apart from what the federal government is willing to pay.”
- PhRMA, the pharmaceutical industry’s biggest lobbying group, and two other organizations: A federal judge in Texas last month dismissed the suit, arguing that the court doesn’t have jurisdiction to listen to the claims.
- U.S. Chamber of Commerce, certainly one of the nation’s largest lobbying groups: A federal judge in Ohio partially ruled in the case in September, denying a preliminary injunction sought by the Chamber that aimed to dam the price talks by Oct. 1. The judge said the group hadn’t demonstrated a “strong likelihood” of succeeding on its claim that this system violates due process.
“The entire momentum is clearly on the side of the federal government at this point, and never on the side of a few of these other manufacturers,” Theresa Carnegie, a member at Mintz Levin, told CNBC.
Several cases are still pending, including legal challenges from big names corresponding to Merck and Johnson & Johnson. Decisions in those cases will likely come by the tip of the yr, Carnegie noted.
But she said the rulings we have seen up to now “are meaningful” for those remaining legal challenges.
“Any judge in other cases goes to take a look at the previous decisions, and it’s necessarily going to influence them in terms of their potential decisions, how they might view it, and they might have to seek out a novel theory or go against it,” Carnegie said. For instance, she noted that courts in two cases already struck down the pharmaceutical industry’s due process claims.
Drugmakers have said they aim to escalate their legal fight over Medicare drug price negotiations to the Supreme Court.
Here’s how: The businesses scattered their suits in federal courts across the U.S. Several legal experts have said that the industry hopes to acquire conflicting rulings from federal appellate courts, which could fast-track the difficulty to the nation’s highest court.
But Carnegie said it’s looking “less and fewer possible” the legal battle will reach the Supreme Court.
With three rulings in favor of the Biden administration, the pharmaceutical industry might want to see a court take a distinct position over the next several months to create a “circuit split” that the Supreme Court could conform to review.
Still, “given how handily a few of these decisions have come out and the way the courts have made these determinations, it doesn’t seem that these issues are creating uncertainty or a circuit split,” Carnegie said.
So, what happens next? Carnegie said drugmakers appear to acknowledge that their lawsuits may not go the best way they need, so that they could shift their litigation focus to how the federal government implements this system.
Drugmakers and trade associations are going to look “for any opportunity to object to the best way that this system is being run,” she said.
Be happy to send any suggestions, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.
Latest in health-care technology
CNBC is on the bottom at HIMSS
That is Ashley, reporting live from Orlando, Florida!
I’m certainly one of the greater than 35,000 people attending the HIMSS global health conference this week, and it’s shaping as much as be an important event. Health-care executives and professionals from all around the world are here to debate the most recent care trends and cutting-edge tech, and I’ll bring you every little thing you could know from the bottom.
I went to HIMSS for the primary time last yr when it was held in Chicago, and artificial intelligence completely stole the show. All anyone could discuss was generative AI and its potential, especially for the reason that conference took place just a few short months after OpenAI’s ChatGPT exploded into the general public sphere.
I’m expecting AI to be the dominant theme again this yr, though in a rather different capability. Last yr, there was loads of discuss what the technology could someday achieve as corporations like Epic Systems, Microsoft, Amazon and Google announced early AI applications and partnerships.
An indication is posted at Salesforce headquarters on February 28, 2024 in San Francisco, California.
Justin Sullivan | Getty Images
This yr, I believe the main target will probably be on what AI is already achieving in the sector. Because the market becomes increasingly saturated with health-care-specific AI solutions, tech corporations must prove that their tools are efficient, effective and, in fact, protected, in the event that they need to remain competitive. Game on!
There have already been a pair announcements of note. Salesforce unveiled latest AI solutions ahead of HIMSS that would help reduce clinicians’ administrative workloads by unifying disparate data and automating some manual tasks. Microsoft announced the formation of the Trustworthy & Responsible AI Network on Monday, which is able to aim to enhance the standard and trustworthiness of the tech in health care, in keeping with a release. Microsoft’s announcement fell only one week after the Coalition for Health AI named its CEO and board of directors, so efforts to manage using AI in health are heating up.
Other than the conference, I’ve also learned that Orlando is a serious health tech hub in its own right. I toured three facilities on Monday in a component of town called Lake Nona. Here, amongst gleaming latest buildings and palm trees, health systems are piloting and developing state-of-the-art technologies before rolling them out more broadly. More details to return on this soon.
It should be a busy week here, and this Recent York journalist might even get to see some sunshine in between meetings. What more could I ask for?
Be happy to send any suggestions, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.