Category Archives for Courts

Federal Court denies attempt to stop Medicare drug negotiation program

Published in RINewsToday on November 6, 2023

Over two months ago, as supporters of President Biden’s Inflation Reduction Act (IRA) celebrated the one-year anniversary of the passage of the historic legislation, the U.S. Chamber of Commerce, Pharmaceutical Research and Manufacturers of America (PhRMA), along with drugmakers filed multiple lawsuits to block the IRA’s drug price negotiation provisions.  The drug price negotiation program, created by IRA, allows Medicare to use its bargaining power to negotiate the prices of ten prescription drugs for the first time.

The multiple-filed legal suits came weeks before Sept. 1 when the for Centers Medicare & Medicaid Services (CMS) was scheduled to publish a list of the first 10 drugs that would be subjected to negotiations.  These lawsuits argued that the federal price negotiation program was unconstitutional because it violated the First and Fifth Amendments of the U.S. Constitution, as well as the separation of powers clause, by giving the U.S. Department of Health and Human Services (HHS) discretion over a maximum fair price for any given drug selected for negotiation.  These lawsuits also charge that CMS price controls would force drug makers to pull back on developing new drugs, jeopardizing medical breakthroughs for individuals with life-threatening and chronic illnesses. 

Among the nine lawsuits scheduled to go to trial, one was a motion filed on July 12, 2023 by the Chamber and several of its affiliates in Ohio. This motion requested the court to issue a preliminary injunction to halt the Medicare drug negotiation program from implementation. The ruling came before the Oct. 1, 2023 deadline requiring drugmakers whose pharmaceuticals were selected for negotiations to either sign agreements to participate or to face stiff penalties.  

The U.S. Department of Justice opposed the Chamber’s motion, filing a motion to dismiss its case.  On Sept. 15, 2023, the court held oral arguments giving the  Chamber and the DOJ an opportunity to present their legal arguments in greater detail.  

Overcoming a Major Legal Hurdle 

On Friday, September 29, 2023, U.S. District Judge Michael J. Newman for Southern District of Ohio, denied the Chambers request to block implementation of the newly established Medicare drug price negotiation program before the drug price negotiation talks began.  The ruling called on the Chamber to file an amended complaint by Oct. 13, 2023. DOJ would then have until Oct. 27, 2023 to renew its motion to dismiss.

According to Spencer Kimball of CNBC, legal experts say the pharmaceutical industry hopes to see conflicting rules from lawsuits filed in other federal appellate courts to bring this issue to the Supreme Court for final resolution. 

The Willimantic, Connecticut-based Center for Medicare Advocacy (CMA), a nonprofit group pushing for comprehensive Medicare coverage, health equity and quality of health care for seniors and people with disabilities, is encouraged by Judge Newman’s ruling, which assessed the drug manufacturer’s claims “to be weak in the face of clearly established laws.”

According to CMA, the 28-page court order found that the Chamber and other plaintiffs had demonstrated neither likelihood of success on the merits, nor irreparable harm, which are required for a preliminary injunction.  CMS noted that this case cited “clear” law that “participation in Medicare, no matter how vital it may be to a business model, is a completely voluntary choice.” The court also found that the price established by negotiations cannot be considered ‘confiscatory,’ as the Chamber charges or “a violation of due process, because drug manufacturers can opt out of Medicare entirely.”

Newman’s ruling noted that drugmakers are not compelled to sell drugs at the prices established by the Medicare program and that any economic harm, when the negotiated drug prices take effect in 2026, was too speculative to warrant immediate relief, reported CMS.  However, the court did deny the government’s motion to dismiss the lawsuit entirely, saying that more information on whether the plaintiffs have standing to sue would be beneficial and therefore the judge is allowing for limited discovery to clarify issues related to legal standing, after which the government may renew its motion to dismiss, noted the Medicare advocacy group.

With this ruling, Medicare may move forward with its implementation of its drug negotiation program as this case and others continue to proceed. 

Giving their two cents…

At press time, the Chamber did not respond to a request for comment about the court’s ruling.  But health care and aging advocacy groups issued statements expressing their thoughts about the impact of Newman’s ruling. 

“This is the first major blow to Big Pharma in its legal battles to block the drug price negotiation provisions under the Inflation Reduction Act, says Peter Maybarduk, Public Citizen’s director of the Access to Medicines program.

“The Chamber’s lawsuit lacks merit; the court made the right decision not to grant the injunction, which would have caused needless patient suffering and treatment rationing, notes Maybarduk, calling on drugmakers “to drop their lawsuits and drop their prices.”

“Now, drug companies should agree to participate in the negotiation program in good faith. The program is an important first step in ending the exorbitant prices charged to Medicare enrollees,” adds Maybarduk.

Frederick Isasi, Executive Director of Families USA, happily noted that the Medicare drug negotiation program continues, calling the ruling “a big win for seniors and their ability to purchase life-saving medications. The ability to afford medication is a matter of life and death for millions of older adults. That’s why we are fighting this David and Goliath battle – people deserve to pay a fair price for their drugs and Medicare price negotiation is a critical piece of this puzzle. And let’s not forget each drug subject to fair price negotiation is an old drug that millions of people need and doesn’t have competition,” he notes.

“It never ceases to amaze us that – on one hand – Big Pharma can cry poverty by saying that drug negotiations will hurt their bottom line, while recent earnings reports show they are raking in money hand over fist.  We are glad Judge Michael J. Newman, a Trump appointee in Ohio’s Southern District, saw through this hypocrisy by affirming the Biden administration’s power to begin negotiating the prices of 10 medications with drugmakers,” says Dan Adcock, Director of Government Relations and Policy, of the Washington, DC-based National Committee to Preserve Social Security and Medicare. (NCPSSM).

According to NCPSSM, Drug makers made a whopping $493 billion in revenue from ten drugs that are now subject to price negotiations between CMS and the manufacturer, which have accounted for more than $170 billion in gross Medicare spending, according to a report from the nonprofit, Protect Our Care.

“The court’s decision to allow Medicare drug price negotiations to move forward is welcome news, says William Alvarado Rivera, Senior Vice President for Litigation at AARP Foundation. “Pausing Medicare negotiations would have risked billions of dollars in savings for taxpayers – and countless lives. It is unconscionable that Americans face such high prescription drug costs that many people skip taking medication altogether or must ration it,” he said.

“We’re prepared to fight for as long as necessary to ensure big drug companies can’t charge excessive prices at the expense of patients’ health, says Rivera, noting that the new Medicare negotiation law would bring financial and medical relief to millions of older Americans and their families, and put drugs that treat life-threatening and chronic conditions, from cancer to heart disease, within their reach. Rivera says, “It must not be derailed.” 

Congress has put the breaks to the spiraling costs of pharmaceuticals by giving Medicare the authority to negotiate the price of popular drugs with drug makers.  America’s seniors will continue to suffer financial  hardships and many might even lose their lives by not choosing not to take their costly medications if courts rule in favor of drug companies.  Time will tell.   

U.S. Judge Michael J. Newman ruling denying the U.S. Chamber of Commerce’s request for a preliminary injunction, go to https://www.bloomberglaw.com/public/desktop/document/DaytonAreaChamberofCommerceetalvBecerraetalDocketNo323cv00156SDOh/5?doc_id=X3U600KOGG69QHQBPEU24OS1JMO

A listing of drugmaker revenues of the first ten negotiated drugs, go to https://www.protectourcare.org/by-the-numbers-the-ten-costly-drugs-that-are-now-eligible-to-have-lower-prices-negotiated-by-medicare/

Supreme Court Jumps into Age Discrimination Debate

Published in Pawtucket Times on March 25, 2002

In 1983, my 70-year-old father expressed his concerns about job hunting in his senior years.

Like many at his age, he was not considering retirement but was seeking a new professional challenge. He began to put out feelers for new employment while still being employed by a Dallas, Texas-based retail chain after m ore than 40 years of service.

They won’t hire me if they find out my age,” my father staid, adding that he believed that job experience gleaned from years of employment is not valued by many in corporate America.

Sadly, my father’s fears of age discrimination expressed to me years ago is still documented today by the federal government.

Last year, more than 20 percent of the 80,840 discrimination complaints filed with the Equal Employment Opportunity Commission against private-sector employers were related to age discrimination.

Last week, the Supreme Court jumped into the age discrimination debate and will determine whether seniors have the same legal rights as other types of discrimination claim suits do.

Layoffs at the Florida Power Corporation during a series of reorganizations led to the termination of Wanda Adams and 116 older workers.

More than 70 precent of these persons were at least 40 years old or older. A lawsuit, Adams vs. Florida Power Corp. was filed, claiming the Florida-based corporation discriminated against older workers based on their age in violation of the Federal Age Discrimination in Employment Act.

Under the 1967 federal statute, older workers must not be treated differently than younger workers because of their age.

The 11th U.S. Circuit Court of Appeals in Atlanta affirmed the trial court’s decision that older workers could challenge their termination by proving that their employer’s action had a discriminatory motive or intent (disparate treatment) rather than a disproportionate impact (disparate impact) on older workers.  AARP believes that this court ruling would make age bias suits tougher to prove, giving employers a greater ability to trim their payrolls of older workers.

Now the U.S. Supreme Court is posed to consider a hot judicial issue, especially one that will impact millions of employed aging baby boomers.

AARP, a Washington, DC-based aging advocacy group that represents more than 35 million members, has filed a “friend of the court brief” showing that its support of disproportionate impact, for use in proving age discrimination suits.

The nonprofit group says that the U.S. Supreme Court has already ruled that these types of suits are allowed under the 1964 Civil Rights Act, to prove discrimination based on an employee’s gender, religion or race.

AARP official Laurie McCann states that if the U.S. Supreme Court supports AARP’s legal position, then older workers can win suits by not having to show employer’s intent to discriminate.

“Older employees will always find it hard to prove intent, because it’s difficult to get inside the employer’s head to get evidence as to what they are thinking.”

McCann says oral arguments were heard on March 20, and the justices ruling should be expected to the end of June.

“We will explore  the possibility of a legislative fix,” she adds, “to allow older workers to prove age bias if they’ll company’s practices and policies has a disproportionate impact on older workers.”

Adds AARP State Director Kathleen Connell, “Once unemployed older workers face sharply limited employment opportunities, re-employment after job loss declines dramatically at older ages.

“Older workers have a fundamental right to work in an environment free of age discrimination,” she says. “Age discrimination can be blatant or subtle and can include such practices as refusing to hire or promote older workers, encouraging their retirement, targeting them in reductions in force, curtailing their employee benefits on liming their training opportunities job responsibilities and duties.”

If the U.S. Supreme Court rules to make age bias suits tougher to prove, then aging baby boomers will continue to face the same concerns of my father’s generation – that age discrimination runs rampant throughout corporate America.

When reviewing the merits of the Adams case, it is hope that the justices will see the wisdom of giving older workers the same legal clout as women, minorities, gays and religious persons. Courts have allowed these groups to legally challenge racial, sexual or religious discrimination on the grounds that an employer’s actions had a disproportionate impact on them.

It’s time to protect older workers, too. It’s only fair.