Tag Archives for Frederick Isasi

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/

Ahead of Midterms, Trump Unveils His Proposal to Slash Prescription Drug Costs

Published in Woonsocket Call on October 28, 2018

With mid-term elections looming, President Trump moves to block Democrats tying the high cost of prescription drugs to an unresponsive Republican-controlled Congress and to GOP efforts to undo health care protections for people with preexisting medical conditions, one of the most popular provisions of the Affordable Care Act, referred to as Obamacare.

According to recent Roll Call poll, health care is a top issue for Democratic and Independent voters in key battle ground states while the GOP tout’s immigration and the economy and jobs as its priority.

Last Thursday, afternoon, at the Department of Health and Human Services (HHS) with Secretary Alex Aza, FDA Commissioner Scott Gottlieb and CMS Administrator Seem Verman standing by President Trump, he announced major changes as to how Medicare pays for prescription drug to bring down costs by making prescribed medications more affordable to seniors, making pricing of U.S. drugs fairer relative to costs paid by other countries.

Bringing Down Medicare’s Skyrocketing Drug Costs

“We’re taking aim at the global freeloading that forces American consumers to subsidize lower prices in foreign countries through higher prices in our country,” said Trump at the Oct. 25 press conference in his 14-minute speech. He noted that the costs for the same pharmaceutical drug in some countries are 20 percent less than those purchased in the United States even though it was made by the same manufacturing company.

“At long last, the drug companies and foreign countries will be held accountable for how they rigged the system against American consumers,” says Trump.

Trump rattled off specific examples of how Medicare pays higher prices for the same pharmaceutical drugs that are cheaper in other developed countries. For instance, one eye medication that prevents blindness would annually cost about $187 million rather than $1 billion dollars if Medicare paid the same prices other countries pay, he said.

Another example, a highly used and very effective cancer drug is nearly seven times as expensive for Medicare as it is for other countries, said Trump, noting that “this happens because the government pays whatever price the drug companies set without any negotiation whatsoever.”

Under Trump’s unveiled proposal, a new Medicare model, the International Pricing Index (IPI), is created to bring down Medicare drug costs to ensure seniors get a “more fair deal on the discounts drug companies voluntarily give to other countries.”

Currently, Medicare sets payments for physician-administered drugs at the average sales price in the U.S. market—plus a price-based add-on fee. Trump’s proposal would allow Medicare to set the payment of these drugs at a Target Price, based on the discounts drug companies give other countries. With the model fully implemented, it is estimated that total payment for these drugs would drop by 30 percent.

Under the IPI model, described in an Advance Notice of Proposed Rulemaking, Medicare’s payments for select physician-administered drugs would shift to a level more closely aligned with prices in other countries. Overall savings for American taxpayers and patients is projected to total $17.2 billion, with out-of-pocket savings potentially totaling $3.4 billion over five years.

Medicare beneficiaries not covered by the IPI model could also see their drug costs lowered, because the average price used to calculate traditional Medicare reimbursement will drop.

Trump’s drug pricing proposal still needs to be refined and put though a federal rule-making process and its impact may not be seen for years.

Is Trump’s Efforts to Lower Drug Costs Just Election Year Posturing?

“It’s hard to take the Trump administration and Republicans seriously about reducing health care costs for seniors two weeks before the election when they have repeatedly advocated for and implemented policies that strip away protections for people with pre-existing conditions and lead to increased health care costs for millions of Americans,” says U.S. Senate Minority Leader Chuck E. Schumer in a statement.

“Once again, the President’s plan doesn’t go far enough to bring down the costs of prescription drugs. Democrats have proposed letting the HHS Secretary negotiate the prices of all drugs covered under Medicare, as well as new tools to ensure transparency and accountability when companies try to raise their prices. Without these critical steps, the President’s plan is just more words with little substance,” says Rhode Island Congressman David N. Cicilline.

Pharmaceutical Research and Manufacturers of America (PhRMA) president and CEO Stephen J. Ubl, opposes Trump’s proposal to lower Medicare’s drug costs, warning that it would “jeopardize access to medicines for seniors and patients with disabilities living with devastating conditions such as cancer, rheumatoid arthritis and other autoimmune diseases.” Trump’s proposal severely alters the Medicare Part B program by reducing physician reimbursement and inserting middlemen between patients and their physicians,” charges Ubl.

Adds, Frederick Isasi, executive director of Families USA, in his statement: “The data is clear. The way we currently pay providers and pharmaceutical companies for drugs administered in doctors’ offices and hospitals creates perverse financial incentives for providers to select extraordinarily expensive drugs that may not be best for their patients. “

“Medicare Part B is the perfect example of misaligned incentives, and the proposed rule, if implemented, could pilot significant new ways to pay for drugs that align incentives so that patients get the highest value care, they have the best outcomes possible, and costs come down, says Isasi.

Like many, Isasi hopes that Trump’s proposal of using the power of the federal government to reduce Medicare drug costs is “not just election year posturing” but truly reflects a policy shift to using federal negotiating power to get unstainable prescription drug prices under control.

Next year, after the dust settles after the mid-term elections, Congress must work together to hammer out a comprehensive legislative strategy to lower pharmaceutical drug costs and to provide health care to all Americans. Listen to the polls.