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Court Allows Medicare Drug Price Negotiations to Continue

November 28, 2023

For more information about this blog post, please contact Ryan L. O’Neill, Labinot Alexander Berlajolli, Jessica T. Osterlof or Samantha T. Baccaro.

A federal court recently denied the U.S. Chamber of Commerce (the “Chamber”) and their state and local chapters' request for a preliminary injunction to block Medicare from negotiating drug prices with manufacturers under the Biden Administration’s new program. The program was established under the Inflation Reduction Act ("IRA") in 2022 and gave Medicare Parts B and D the power to select prescription medicines with no generic or biosimilar competition and negotiate a “maximum fair price” to go into effect in 2026.

U.S. District Judge Michael J. Newman in Ohio’s Southern District rejected the Chamber’s argument that the program forces drugmakers to accept unfairly low prices because participating in Medicare is “completely voluntary.” Also, Judge Newman issued no opinion on the government’s argument that the Chamber had no standing to sue on behalf of pharmaceutical companies, which potentially leaves the door open for future motions.

With the preliminary injunction denied, the program is proceeding as scheduled and selected drugmakers were required to sign an agreement with the Centers for Medicare & Medicaid Services ("CMS") by October 1 to begin negotiating for the first round of selected drugs. CMS will then publish the negotiated prices for the first round of selected drugs by September 1, 2024, and those prices will become effective January 1, 2026. Thereafter, CMS will select 15 more Part D drugs for negotiation in 2027, 15 more Part B or Part D drugs for 2028, and 20 more Part B or Part D drugs for each year following.

The 10 prescription drugs and their participating manufacturers selected by the U.S. Department of Health and Human Services (“HHS”) for the first round include:

  1. Eliquis, a preventive drug and treatment for blood clots — Bristol Myers Squibb
  2. Jardiance, a Type 2 diabetes and heart failure drug — Boehringer Ingelheim
  3. Xarelto, a blood clot preventive drug and treatment, and a medication for coronary and peripheral artery disease — Janssen Pharms
  4. Januvia, a Type 2 diabetes drug — Merck Sharp Dohme
  5. Farxiga, a medication for Type 2 diabetes, heart failure, and chronic kidney disease — AstraZeneca AB
  6. Entresto, a heart failure drug — Novartis Pharms Corp
  7. Enbrel, a therapy for rheumatoid arthritis, psoriasis, and psoriatic arthritis — Immunex Corporation
  8. Imbruvica, a blood cancer treatment — Pharmacyclics LLC
  9. Stelara, a drug for psoriasis, psoriatic arthritis, Crohn's disease, and ulcerative colitis — Janssen Biotech, Inc.
  10. Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, and NovoLog PenFill; Type 2 diabetes drugs — Novo Nordisk Inc.

AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Johnson & Johnson, Novartis, Merck, and Novo Nordisk are among the companies challenging the new drug price negotiation program.

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Ryan Lee O'Neill

Ryan Lee O'Neill

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Samantha T. Baccaro

Labinot Alexander Berlajolli

Labinot Alexander Berlajolli

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