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/

Modest Social Security COLA increase seen as chump change by some

Published in RINewsToday on October 16, 2023

Last week, the Social Security Administration (SSA) announced that Social Security and Supplemental Security Income (SSI) benefits for more than 71 million beneficiaries will increase 3.2% in 2024, about $59 per month starting in January. The 2024 payment declined from last year’s 8.7%, but that had been the highest in four decades. And, its higher than the average 2.6% increase recorded over the past 20 years.

The Social Security Act determined how the cost-of-living adjustment (COLA) is calculated. Enacted on August 14, 1935, the Act ties the annual COLA to the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as determined by the Department of Labor’s Bureau of Labor Statistics.

More than 66 million Social Security beneficiaries will see that COLA increase 3.2% beginning in January 2024, and increased payments to approximately 7.5 million people receiving SSI will begin on December 29, 2023. (Note: some people receive both Social Security and SSI benefits).

“Social Security and SSI benefits will increase in 2024, and this will help millions of people keep up with expenses,” observes Kilolo Kijakazi, Acting Commissioner of Social Security in an Oct. 12 statement announcing this year’s COLA increase.

According to SSA, some other adjustments that will also take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $168,600 from $160,200.

Advocacy groups on aging talk turkey about COLA

“The annual COLA is a reminder of Social Security’s unique importance. Unlike private-sector pension plans, whose benefits erode over time, Social Security is designed to keep up with rising prices, noted Nancy Altman, President of the Washington, DC-based Social Security Works (SSW), in response to SSA’s COLA announcement.

“Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices,” said Jo Ann Jenkins, AARP chief executive. “We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important,” she added, stressing that Social Security has been the foundation for financial security for hundreds of millions of retirees. “SSA’s COLA announcement shows that it’s continuing to deliver on this promise,” she says.

However, Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare charges, “While we are grateful that Social Security is the only major retirement program with a built-in cost-of-living adjustment, the current formula for determining COLAs is inherently flawed. SSA’s current COLA formula doesn’t truly reflect the increase in prices for the goods and services that beneficiaries rely on.”

According to Richtman, the 3.2% 2024 COLA only represents a modest $59 increase in the average monthly benefit for retired workers, and that’s before deducting the projected increase in the 2024 Medicare Part B premium of about $10 per month. Because of this the average retirement beneficiary will receive a net COLA of about $50.

Richtman notes, “That is not enough for a tank of gas or half a week’s worth of groceries in many states. The net COLA will barely cover one brand-name prescription co-pay for some patients.”

Last year, Richtman noted that the COLA of 8.7% was unusually high, the highest in some 40 years. But post-pandemic inflation was also at record highs, he said, noting that historically, COLA’s have been relatively low. In fact, the COLA has been ZERO; three times since 2009.

“Seniors deserve an accurate COLA formula that accounts for the impact of inflation on their living costs. That is supposed to be the entire purpose of a COLA. The current formula measures the impact of inflation on urban wage earners and clerical workers. How is that a reasonable formula for seniors? Seniors have different spending patterns than urban wage earners & clerical workers,” asks Richtman.

Richtman notes that seniors spend more than other age group on expenses like housing, long-term care, and medical services. “We strongly favor the adoption of the CPI-E (Consumer Price for the Elderly) for calculating COLAs. The CPI-E would more accurately reflect the impact of inflation on the goods and services seniors need, he believes.

The CPI-E is included in both major pieces of legislation to expand and protect Social Security that have been introduced in this Congress: Bernie Sanders’ Social Security Expansion Act and Rep. John Larson’s Social Security 2100 Act. We have endorsed both of those bills as part of our commitment to boosting Social Security for current and future retirees. It’s past time for Congress to act,” says Richtman.

Although the 3.2% COLA is well above the 2.6% average over the past 20 years, a newly released retirement survey released on Oct. 12, 2023, by The Senior Citizens League (TSCL) indicates that seniors are pessimistic about their financial well-being in the upcoming months and very concerned about growing calls on Capitol Hill for Social Security cuts. Sixty-eight percent of survey participants report that their household expenses remain at least 10 percent higher than one year ago, although the overall inflation rate has slowed. This situation has persisted over the past 12 months.

According to TSCL’s latest retirement survey, worry that retirement income won’t be enough to cover the cost of essentials in the coming months is a top concern of 56 percent of survey respondents. Social Security benefit cuts are an even bigger concern, ranked as the number one worry by nearly 6 out of 10 survey participants, or 59%. Over the past year, benefit cuts and trims have affected a large percentage of older Americans low-income households, individuals who can least afford them.

A year ago, TSCL warned that higher incomes due to the 5.9% and 8.7% COLAs in 2022 and 2023 could potentially affect eligibility for low-income assistance programs such as SNAP and rental assistance. Earlier this year, federal emergency COVID assistance for SNAP (food stamps) and Medicaid also ended. Surveys conducted in 2022 and this year suggest that significant numbers of lower-income older households have lost access to some safety net programs over the past 12 months, the survey finds.

A Final Note…

Social Security plans to start notifying beneficiaries about their new COLA amount by mail starting in early December. Individuals who have a personal “my Social Security account” can view their COLA notice online, which is secure, easy, and faster than receiving a letter in the mail. People can set up text or email alerts when there is a new message–such as their COLA notice—instead of waiting for them in my Social Security.

People will need to have a “my Social Security account” by November 14 to see their COLA notice online. To get started, visit www.ssa.gov/myaccount.

Information about Medicare changes for 2024 will be available at www.medicare.gov. For Social Security beneficiaries enrolled in Medicare, their new 2024 benefit amount will be available in December through the mailed COLA notice and my Social Security’s Message Center.

For details about SSA’s 2024 Changes, go to: https://www.ssa.gov/news/press/factsheets/colafacts2024.pdf.

Will Magaziner fulfill call to reestablish House Aging Committee?

Published in RINewsToday on October 9, 2023

With Congressman David Cicilline retiring from Congress, no House lawmaker has yet stepped up to reintroduce, H.R. 583, the Rhode Island lawmaker’s resolution to reestablish the House Select Committee on Aging (HSCoA). Without receiving a vote in the House Rules Committee at the end of the 117^th Congress, the resolution was considered “dead.” On his way out Cicilline was not successful in passing the legislative baton and finding a new original sponsor.

The resolution to approve the initial HSCoA was passed on October 8, 1974, by a large margin (299–44) in the House. Its legislative duties expired in 1992 during the 103^rd Congress, as the House leadership was under pressure to reduce its internal costs to save $1.5 million and to streamline the legislative process.

On May 26, 2016, Cicilline began his legislative efforts to bring back the HSCoA. The simple resolution, consisting of 245 words, would authorize the Select Committee to study the use of all practicable means and methods of encouraging the development of public and private programs and policies which will assist seniors in taking a full part in national life and which will encourage the utilization of the knowledge, skills, special aptitudes, and abilities of seniors to contribute to a better quality of life for all Americans.

HSCoA would not craft legislative proposals, but hold investigative hearings to put the Congressional spotlight on aging issues. Its purpose was to push for legislation and other legislative actions, working closely with standing committees, through regular committee channels.

According to the Congressional Research Service, it would be relatively simple to create a select committee by approving a simple resolution that contains language establishing the committee—giving a purpose, defining membership, and detailing other issues that need to be address. Salaries and expenses of standing committees, special and select, are authorized through the Legislative Branch Appropriations bill.

Once introduced, the resolution would be referred to the House Rules Committee for consideration. If passed, it would be scheduled for a floor vote. If passed, no Senate action or Presidential signature would be required.

The fourth time’s not the charm

Over eight years (during four Congressional Sessions), Cicilline was unsuccessful in getting the support of either the Republican or Democratic House Speakers to pass his resolution. During the 114^th Congress Cicilline began his legislative push to bring back the HSCoA by introducing H. Res. 758. Twenty-eight Democratic lawmakers out of 435 House members (with no Republican supporting) became cosponsors. But it caught the eye of the co-chairs of the Seniors Task Force (later renamed the House Democratic Caucus Task Force on Aging & Families), Congresswomen Doris Matsui (D-CA) and Jan Schakowsky (D-IL). The lawmakers became cosponsors of this resolution.

Correspondence penned by Cicilline to House Speaker Paul Ryan (R-WI) requesting support of H.R. 758 went unanswered. Without the blessings of the GOP House Speaker, the resolution was not considered in the House Rules Committee and no floor vote scheduled.

Two years later, with Ryan’s GOP caucus still retaining the control of the House during the 115^th Congress, Cicilline’s H. Res. 160 would again not gain legislative traction. At that time only 27 Democratic lawmakers stepped forward to become cosponsors, just like the previous Congressional session, with the resolution not attracting one single GOP lawmaker as a cosponsor.

For the third time, during the 116^th Congress, Cicilline would introduce H. Res. 821 to resurrect the HSCoA. Even with House Speaker Nancy Pelosi controlling the lower chamber’s legislative agenda, the resolution would not get Rules Committee consideration, again blocking it from reaching the floor for a vote.

Even with House Speaker Pelosi retaining the gavel again during the 117^th Congress, Cicilline could not push H. Res 583 to the legislative goal line. Like Cicilline’s other three attempts, the resolution was referred to the House Committee on Rules for mark-up and vote. Without Pelosi’s blessings and support for passage, like previous attempts, the resolution died at the end of the Congressional session.

Cicilline’s efforts drew the support and attention of Max Richtman, President and CEO of the Washington, DC-based National Committee to Preserve Social Security and Medicare, who was former Staff Director of the Senate Special Committee on Aging, the Leadership Council of Aging Organizations (representing 66 national aging groups), along with President Nancy Altman of Social Security Works, and Chair of Strengthen Social Security Coalition.

Robert Weiner, former chief of staff of the HSCoA, Tom Spulak, former staff director and General Counsel of the House Rules Committee, and Vin Marzullo, a well-known aging advocate in Rhode Island, were strong advocates for the resolution’s passage.

It’s a no-brainer not to bring back HSCoA

Weiner, the President of Robert Weiner Associates News, who was a close friend and confidant of Claude Pepper, clearly knew the importance Cicilline’s efforts to bring back the HSCoA and its impact on the quality of life of America’s seniors. Weiner, who served as Staff Director for the Subcommittee on Health and Long-term care from 1975 to 1977 and Chief of Staff of the full Aging Committee, from 1976 to 1980, remembered how the late Congressman Claude Pepper used the Select Committee as a force to push Congress to tackle aging issues.

“Bringing it back would be immeasurably helpful regardless of which party has the White House or controls Congress in assuring the best health care programs for seniors,” says Weiner.

Weiner says that the HSCoA successfully prodded Congress to abolish forced retirement, investigate nursing home abuses, monitor breast cancer screening for older women, improve elderly housing, and bring more attention to elder abuse by publishing a number of reports, including “Elder Abuse: An Examination of a Hidden Problem and Elder Abuse: A National Disgrace,” and “Elder Abuse: A Decade of Shame and Inaction.” The Committee’s work would also lead to increased home care benefits for the aging and establishing research and care centers for Alzheimer’s Disease, he said.

“One of the best-known aging accomplishments of Claude Pepper was to end mandatory retirement by amending the Age Discrimination in Employment Act,” adds Weiner, noting that with HSCoA support the bill passed 359 to 2 in the House and 89 to 10 in the Senate, with President Jimmy Carter signing the bill into law despite strong opposition of the Business Roundtable and big labor.

Weiner noted that among the HSCoA’s other legislative achievements was supporting the passage of legislation creating standards for supplemental insurance and holding hearings to expose cancer insurance duplication. “Witnesses were literally forced to wear paper bags over their heads to avoid harassment by the insurance companies. That legislation became law,” he said.

According to Weiner, “Republican lawmakers just didn’t want to support Cicilline’s resolution to reauthorize the HSCoA,” says Weiner, despite the fact that Congressman John Heinz (R-Pa.), later a renowned Senator, was an original prime sponsor of the House resolution that would initially establish the select committee.

Seniors are now the most powerful voting block who would see the need, like Heinz, for a HSCoA, especially to protect Social Security, Medicare and other federal aging programs, says Weiner. Republican House lawmakers are threatening to cut Social Security benefits and raise the full-time retirement age, he warns, calling their actions “reforms.” “But the program is actually solvent, with trillions in surplus beneficiaries paid for as the Pepper-Reagan original deal provided,” he notes.

If HSCoA resolution is passed during the 118^th Congress, the Republicans would control its legislative agenda. Historically, the House select committee allowed open, bipartisan debate from different ideological perspectives to promote bipartisan consensus that, in turn, would facilitate the critical policy work of the standing committees.

Passing the torch

Who will ultimately pick up the legislative baton from Cicilline to become Rhode Island’s fiery aging advocate. Will it be Congressman Seth Magaziner, or the newly elected Congressman from Rhode Island’s Congressional District 1 to step to the plate?

Why shouldn’t Magaziner or Cicilline’s replacement follow in the footsteps of former Rhode Island Congressman John E. Fogarty (dec.) and be the original sponsor of legislation that will have a major impact on national aging policy. The lawmaker would become a hero to America’s seniors. The White House Conference on Aging was the result of legislation successfully sponsored by Fogarty, and led to the enactment of his bill to establish an Administration of Aging in the Department of Health, Education and Welfare. He was the original sponsor of legislation that established the Older Americans Act of 1965.

But even if a Rhode Island Congressman makes a decision to become the original sponsor to Cicilline’s resolution that reestablishes the HSCoA, passing this resolution in a GOP-controlled House will require support from that caucus.

Congressmen Brian Fitzpatrick (R-PA) and Josh Gottheimer (D-NJ), co-chairs of the “Problem Solvers Caucus,” consisting of essentially an equal number of 63 Republican and Democratic lawmakers, may well be the way to finally pass a resolution to reestablish the HSCoA.

Weiner, who would later become a senior staffer to both the Clinton and Bush White Houses and now is a national columnist and winner of the National Press Club President’s Award for recruiting young journalists, agrees that it is now time to bring the Problem Solvers Caucus to the forefront to endorse and together have a bipartisan House support push for reestablishing the HSCoA. “The Aging Committee has always been bipartisan, with leaders including not only Pepper and Ed Roybal as chairs, but supportive ranking minority members including then House members — later Senators — Chuck Grassley, Bill Cohen, and John Heinz.