Tag Archives for Inflation Reduction Act

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/

Health advocacy groups oppose groups against drug price negotiations

Published in RINewsToday on August 21, 2023

As supporters of President Biden’s Inflation Reduction Act (IRA) celebrate the one-year anniversary of the passage of this historic legislation, health advocacy groups gathered last week in Austin, Texas, Washington, D.C., Chicago and New York City to publicly oppose and call on the U.S. Chamber of Commerce, Pharmaceutical Research and Manufacturers of America (PhRMA) along with drugmakers to withdraw their lawsuits to block the IRA’s drug price negotiation provisions.  They instead called for the immediate lowering of the prices of brand-name pharmaceuticals.

At press time, Merck & Co., Bristol Myers Squibb Company, Janssen Pharmaceuticals, Astellas Pharma US, PhaRMA, and the U.S. Chamber of Commerce have filed lawsuits arguing that the price negotiation program is unconstitutional and violates the Constitution’s 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 charge that the Centers for Medicare & Medicaid Services’ (CMS) price controls would force drug manufacturers to pull back on developing new drugs, jeopardizing medical breakthroughs for individuals with life-threatening and chronic illnesses.

The filed legal suits come weeks before Sept. 1 when CMS is scheduled to publish a list of the first 10 drugs that will be subject to negotiations. By Oct. 1, the drug companies must declare whether they will participate in negotiations or face steep financial penalties for not negotiating. The lower negotiated prices will not take effect until 2026.

Public Citizen, a Washington, DC-based nonprofit consumer advocacy group along with other health care advocacy groups including Patients for Affordable Drugs Now, Protect Our Care, Families USA and Doctors for America and AARP and the AARP Foundation have filed amicus briefs supporting HHS’ position that the motion for a preliminary injunction requested by the Chamber and the other plaintiffs in that case should be denied.

At the Washington, D.C. press conference, Robert Weissman, president of Public Citizen delivered a petition signed by 150,000 individuals to the U.S. Chamber of Commerce demanding that all court suits be dropped. 

Public Citizen, Social Security Works, and more than 70 health and consumer organizations also sent letters to the prescription drug corporations, demanding those corporations drop their lawsuits and begin negotiating lower drug prices.  The letter cited how drug corporations routinely charge Medicare beneficiaries in the United States twice or more of what they charge patients in other large, wealthy countries – even in cases where U.S. taxpayers supported the drug’s development.

“It’s a disgrace that the U.S. Chamber of Commerce is fronting for Big Pharma [against the interests of the mom-and-pop businesses it purports to represent,” said Robert Weissman. “Patients, small businesses, large businesses, state and local governments, and the federal government all have a shared interest in curtailing Big Pharma price gouging, as the Inflation Reduction Act’s drug price negotiation provisions will do.”

“The lawsuits filed by the large pharmaceutical corporations to overturn Medicare drug price negotiation authority demonstrates that there is no bottom to big pharma’s greed, charges Max Richtman, President and CEO of the Washington, DC-based National Committee to Preserve Social Security and Medicare. “It isn’t enough that revenue to U.S. drug corporations was over $1 trillion in 2022.  It isn’t enough that big pharma benefits from the $54 billion spent in taxpayer dollars per year on pharmaceutical research. It isn’t enough that the 2017 Trump tax cut bill lowered average tax rates of the big pharmaceutical companies by more than 40 percent. It isn’t enough that pharma’s profit margin is 15 percent to 20 percent while the average profits of the nation’s largest 500 corporations ranged between 4 percent to 9 percent,” he says.   

“Americans have had enough of big pharma’s greed – and while I am sure the price gougers won’t stop putting profits before people – we urge the industry to drop this unconscionable lawsuit against the authority to negotiate prescription drug prices,” he adds.

“Big drug companies and their allies are fighting furiously to stop Medicare from negotiating drug prices so they can keep charging Americans the highest prices in the world. Allowing these distractions to derail implementation of the law would not be in the public’s interest, especially for older adults who have waited far too long for affordable drug prices. Medicare drug price negotiation represents a historic opportunity to access lifesaving drugs for millions of Americans at a time when they need them the most,” said William Alvarado Rivera, Sr. VP for Litigation at AARP Foundation.

“Pharmaceutical corporations have long shown that they care about nothing but profits. So, it is not surprising that they are attempting to use the courts to subvert the will of the people and block Medicare from using its bulk purchasing power to get better prices,” said Alex Lawson, executive director of Social Security Works. “The law is incredibly clear, as is the will of the American people: Medicare drug price negotiations are legal and incredibly popular. Everybody wins except the greedy CEOs who see their drug price extortion rackets shut down.”

Protests Call for the Immediate Dropping of Court Suits 

On Aug. 16, 2023, in Washington, D.C., the “Drop Your Suits, Drop Your Prices,” a press conference/rally was held outside the headquarters of the U.S. Chamber of Commerce in Washington, D.C., and in New York City outside of the offices of Jones Day, and outside the Federal Courthouse in Austin where some of the drug makers are launching their legal attacks on Medicare, and at the offices of Astellas in Chicago.

At the Washington, DC press conference, a digital billboard advertising on a parked box truck set the stage for the event. In big bold red and gold letters the message read: “The Chamber of Commerce and Big Pharma are suing to keep your drug prices high.  They must drop their lawsuits and lower drug prices.”

Public Citizen’s Weissman kicked off the noon time press conference, stating, the U.S. Chamber of Commerce claims to represent small businesses but these businesses are bearing the brunt of paying for the high price of drugs.  Because of this, 3 in 10 Americans are rationing their drugs, he says. 

Weissman asked why is the U. S Chamber of commerce opposing the interests of small and large businesses? He charges that the nation’s largest lobbying group for the nation’s businesses is “is shamefully fronting for Big Pharma and companies that have an interest in overturning this law” that requires Big Pharma to negotiate with Medicare on drug prices. “But we are here today to tell Big Pharma were not going to let you get away with it,” he says.

“We’re going to win. We’re going to win the in the courts. We’re going to win on the streets. This price negotiation is going to go forward. It’s the beginning not the end in getting big Pharma price gouging under control, making sure medicines are affordable for everyone who needs in this country,” predicts Weissman.

Like all the speakers, 22-year-old Jacqueline Garibay called on the U.S. Chamber of Commerce, PhaRMA, and the other pharmaceutical companies to immediately drop their lawsuits to lower drug prices.  She was diagnosed with Ankylosing Spondylitis, an autoimmune disorder that primarily affects her spine and has spread to most of her major joints. Without expensive biologic medications, Garibay’s spine could fuse and leave her unable to walk by the time she graduates from George Washington University.  

In the last four years since her diagnosis, doctors have put her on four biologic drugs, each one with a price tag ranging from $5,000 to $13,000 every month, trying to find one that will work for her.  There have been times when Garibay has had to forego refilling her prescriptions because of financial difficulties resulting from having to pay for her rent, groceries, and tuition at the same time. “It’s “absolutely terrifying,” she says, fearing that without taking these medications she will risk losing the ability to walk.  

“The new drug price reforms are projected to save patients like her tens of billions of dollars. “It will help me have a future I can afford, a future where I can pursue all my dreams without being financially undermined for the sake of my health condition,” she says.

Laura Marston, a 41-year-old diagnosed with Type 1 Diabetes over 27 years ago at age 14, has seen the price of her insulin soar from the price of a vial for $ 21 to over $300.  “No vial costs Eli Lilly less than $5 to make,” says the resident of Washington, D.C. 

Marston picked up her insulin prescription from the pharmacy a week ago. The price for a three-month supply of seven vials that will enable her to live was $ 2,267.99. “That’s immoral, that’s inhuman and that’s flat out wrong,” she said.

“My message to Eli Lilly, Novo Nordisk, Sanofi and the Chamber of Commerce is lower your insulin prices, or we will do it for you in the form of federal price caps legislation. The 7 million Americans who rely on insulin to level not-stop raising our voices until we no longer have to choose our money or our lives,” she says.

Arthur Blair, a patient advocate for Spaces in Action, described how a debilitating disease forced him to quick his job. What do you do when you don’t have money, not even enough to pay for high cost of drugs,” he asked. 

“Pharma has proven with this latest action [attempting to block the negotiation of drug prices] that they put unreasonable profits before the people. They don’t mind knowing that people are done because they are unable to obtain prescription drugs that would easily save their life and eliminate easier suffering,” charges Blair.

According to HHS, as of June 2021, about 48 million Medicare beneficiaries are currently enrolled in plans that provide the Medicare Part D drug benefit. Last year, Congress came together begin putting the brakes on spiraling drug costs by passing legislation that allows Medicare to negotiate for lower prices.  

Currently drug prices are higher in the U.S. than other countries because Medicare doesn’t negotiate prices with drug makers like other countries do. Because the practice of negotiating drug prices was banned in 2003 under the law that created the Medicare Part D prescription drug benefit, 77 percent of all Medicare beneficiaries pay more for prescription drugs than these nine countries — Austria, Australia, Belgium, Canada, Germany, Japan, Sweden, Switzerland and the United Kingdom (This was documented by a 2021 study of the Rand Corporation.) 

Although the “Drop Your Suits, Drop Your Prices” press conferences held around the nation drew small crowds, the importance of these gatherings is the message they sent to the nation, that is “It’s time to stop blocking a law that puts money into the pockets of seniors instead of the bank account of drug makers.”

To watch the https://www.youtube.com/watch?v=w_8WHFv7oL4

To read why the U.S. Chamber of Commerce is suing the U.S. Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services to challenge drug price negotiations, go to https://www.uschamber.com/lawsuits/why-were-suing-hhs-and-cms-to-challenge-illegal-price-controls.

To read an amicus brief submitted by Public Citizen, Patients for Affordable Drugs Now, Protect Our Care, Families U.S.A and Doctors for American, supporting HHS’s position that the motion for a  preliminary injunction requested by the Chamber and the other plaintiffs in that case should be denied, go to https://www.citizen.org/wp-content/uploads/35-1-Proposed-amicus-brief.pdf.

To read AARP and AARP Foundation’s full amicus brief, go to https://www.aarp.org/content/dam/aarp/aarp_foundation/2023/dayton-area-cha mber-of-commerce-v-becerra-brief.pdf.

Wake up call on spiraling brand-name drug prices 

Published in RINewsToday on August 14, 2023

By Herb Weiss

A new pharmaceutical drug price report that is both timely and overdue has been released by AARP’s Public Policy Institute, following on the heels of the Centers for Medicare & Medicaid Services (CMS) releasing in June, which revised guidance for the historic Medicare Drug Price Negotiation Program.  

This report details the list prices for the 25 brand-name drugs with the highest total Medicare Part D spending in 2021, noting that prices have increased by an average of 226%—or more than tripled—since they first entered the market. Those 25 drugs were responsible for $80.9 billion in total Medicare Part D spending in 2021, about 37% of the total spending, and were used by more than 10 million Part D enrollees.  It noted that, on average, nearly 60% of their current list price was due to price increases after the product entered the market.

The price of Enbrel, used to treat rheumatoid arthritis and psoriatic arthritis, has increased by 701% since coming to market in 1998, and the price of Januvia, used to treat diabetes, has increased by 275% since entering the market in 2006.

Overall, the lifetime price increases ranged from 20% to 739%, and all but one of the drugs’ lifetime price increases greatly exceeded the annual rate of inflation over the same period of time. 

Brand-name drug prices increase faster than inflation has – for decades

“Brand-name drug prices have increased dramatically faster than inflation for decades,” said Leigh Purvis, Prescription Drug Policy Principal, AARP Public Policy Institute, and author of the report.  “The median price of a new brand-name prescription drug is now approximately $200,000 per year, so even relatively small percentage price increases can translate into thousands of dollars and put life-saving medications out of reach of the patients who need them,” she said. 

“We know that there is lot of media attention on individual drug prices that take place year after year.  However, a lot less attention is paid to how those price increases are often building on top of a long line of price increases and how those relentless price increases add up over time,” says Purvis, during a press call to journalists scheduled on the day of the report’s release.

“These findings have huge implications for the people that AARP represents, many of whom need prescription drugs to help them stay well,” Purvis said. “People on Medicare prescription drug plans take on average of between 4 and 5 prescription drugs per month and their drugs are increasing covered using coinsurance where you pay a percentage of the drugs price instead of a flat co-pay.  In fact, across the country more and more people are facing cost sharing directly affected by drug price increases, whether it is by coinsurance or simply before they meet their deductible.  Millions of other people don’t have health coverage and are having to absorb the cost associated with growing drug prices on their own,” she said.

“Our analysis shows that drugs that have been on the market for twenty years or more have seen an average lifetime price increase of 592 percent.  In real terms this can be the difference of thousands of dollars for one person and enough to force the trade-offs that we often hear about, like choosing to put food on the table or being able to pay for gas,” notes Purvis.

“There is no justification for drug companies to engage in these type of price increases every year they are on the market, particularly increases that are so much higher than the price increases for other goods and services,”  adds Purvis. 

CMS releases revised guidance for negotiating with drug manufacturers 

Congress recently passed the Inflation Reduction Act (IFA), a federal law requiring drug companies to pay a penalty to Medicare if their drug’s price increases faster than the rate of inflation. The law will also give Medicare the ability to negotiate lower drug prices with drug companies for the first time. CMS is expected to announce the first 10 drugs selected for negotiation by September 1st, and the negotiated prices will become available in 2026.

“This historic law cracks down on the big drug companies and [will bring] real relief to millions of seniors who have been struggling with out-of-control prescription drug prices,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy and Engagement Officer. “American families simply can’t afford to keep paying the highest prices in the world for the medications they need.”

Last March, CMS issued initial guidance to seek comments on its historic Medicare Drug Negotiation Program.  The agency received over 7,500 comments from consumer, patient groups, drug companies and pharmacies.  In June, CMS released its revised guidelines detailing the requirements and parameters of how the agency will oversee the new program.

“Issuing final guidance for the Medicare Drug Price Negotiation Program is an important “next step” in controlling spiraling high drug prices, says AARP’s LeaMond, noting that Medicare’s new buying power will get a better price for Medicare beneficiaries, saving the program billions of dollars and making prescription drugs more affordable.

Opposition, of course

At press time, the Pharmaceutical Research and Manufacturers of America (PhRMA), the leading industry lobby group for pharmaceutical companies, along with a group of pharmaceutical companies and trade groups, are suing the U.S. Health and Human Services to block the implementation of the Medicare Drug Price Negotiation Program established by the Inflation Reduction Act enacted by President Biden last August. The U.S. Chamber of Commerce has also filed a lawsuit in a U.S. District Court in Ohio to ask for an injunction to keep the negotiations from going forward. The trade group is challenging the constitutionality of the IFA’s drug price negotiation program.   

It’s a very high lift and big burden to meet the standard to stop the law from being implemented,” noted Kelly Bagby, AARP’s Vice President at AARP Foundation Litigation, before AARP’s press call ended.

“It is entirely appropriate and is necessary and the public interest is so enormous in balancing of the government’s interest verses the pharmaceutical companies and Chamber’s interest in this case,” says Bagby,” stressing that beneficiaries have to win this case. “It’s so obvious that pharmaceutical companies are not the victims they are painting themselves to be, she adds, affirming her belief that beneficiaries and Medicare have the strongest argument.  

Bagby noted, “AARP is working to protect the integrity of whole Medicare program for everybody and to allow for older people to not have to make horrible choices about do I pay my rent or do I get to take my life saving drugs.” 

Reports a Wake-Up Call

Although PhRMA,  pharmaceutical companies and trade groups along with the U.S. Chamber are strongly opposed to CMS’s new program to negotiation drug prices, polls show that people aged 50 and over, view the lowering of the price of costly prescription drugs to be a very important policy issue to them. Purvis hopes that the recently released AARP report will serve as a wake-up call for every American who is skeptical about the importance of lowering prescription drug prices. “Higher government spending driven by drug price increases will affect all Americans in the form of higher taxes, cuts to public programs, or both,” she predicts.  

For a copy of AARP’s Medicare Part D Drug Price report, go to https://www.aarp.org/pri/topics/health/prescription-drugs/prices-top-medicare-part-d-drugs-tripled-since-entering-market.html.