With Boehringer ruling, industry extends legal losing streak against Medicare price negotiations
08 Jul 2024
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Source: FiercePharma
The pharma industry has taken yet another legal loss as it contends with the Inflation Reduction Act's Medicare price negotiations.
As the process surrounding Medicare's drug price negotiations rolls on this summer—and as the pharmaceutical industry continues to loudly voice its complaints—another lawsuit contesting the legal viability of the setup has come up short.
Boehringer Ingelheim's lawsuit challenging the constitutionality of the Inflation Reduction Act's (IRA's) Medicare price negotiations was turned away in the U.S. District Court for the District of Connecticut, according to a July 3 opinion by the court.
In its case, BI had alleged that the IRA violates several parts of the U.S. Constitution, including the First Amendment, plus that the Centers for Medicare & Medicaid Services (CMS) didn't fulfill legal requirements with its implementation of the law.
After reviewing arguments from both sides, Chief District Judge Michael P. Shea granted the government's motion for summary judgment. The judge addressed BI's arguments one by one, knocking back each claim after reviewing the facts of the case and the procedural history.
Crucially, the judge ruled that BI's participation in the Medicare pricing negotiations is "voluntary" because the drugmaker "was free to withdraw from Medicare and Medicaid before the deadline for signing the manufacturer agreement."
BI had argued that withdrawing from the federal healthcare programs was not a realistic choice given the "economic cost" of doing so, the judge explained.
Still, in October, CMS revealed that each of the manufacturers affected by the Medicare price talks had agreed to participate in the process.
BI's result extends the industry's legal losing steak against the IRA, following similar outcomes for AstraZeneca's complaint in early March and Johnson & Johnson and Bristol Myers Squibb's cases in late April.
Besides those cases, a Texas judge in February rejected an IRA lawsuit brought by the lobbying group PhRMA. And, last fall, an Ohio federal court batted back an attempt by the U.S. Chamber of Commerce to delay Medicare pricing negotiations until the IRA litigation could play out.
Lawsuits from Novo Nordisk, Merck and Novartis are still pending.
A spokesperson for BI said the company is "disappointed by this ruling and what it means for biopharmaceutical innovation."
"Boehringer Ingelheim shares the goal of ensuring our medicines are affordable and available to people who need them—however, we remain concerned about the detrimental and limiting effects the IRA and its 'negotiation' program will have on the future of innovation for the patients we serve," the spokesperson added.
Meanwhile, drug companies have been engaged in pricing negotiations with the government over the last several months. For the first round of 10 drugs, the negotiation process is set to end Aug. 1. CMS plans to publish its "maximum fair prices" for those medicines Sept. 1, and, pending manufacturer agreements, the prices would go into effect in early 2026.
Editor's note: This story was updated with a statement from Boehringer Ingelheim.
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