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A federal judge in Texas on Monday tossed a lawsuit filed by a leading drug industry trade group to halt Medicare drug pricing negotiations, handing the Biden administration a major victory in its plans to implement a key health policy reform in recent history.
The U.S. District Court for the Western District of Texas dismissed the suit filed by the Pharmaceutical Research and Manufacturers of America (PhRMA) along with the National Infusion Center Association (NICA) and the Global Colon Cancer Association in June 2023.
In his ruling, Judge David Alan Ezra said that the court lacked jurisdiction over NICA’s claims against the price negotiation process.
“The Court lacks jurisdiction over NICA’s claims because the claims here ‘arise under’ the Medicare Act, and the claims do not fall under the exception carved out for when claims may completely avoid judicial or administrative review. Therefore, NICA’s claims are dismissed without prejudice,” Ezra wrote.
His ruling marks the first time a court has overturned a legal challenge to the legislation implemented under President Biden’s Inflation Reduction Act last year. Eight other cases filed by major drugmakers, such as Merck (NYSE:MRK) and Bristol Myers (NYSE:BMY), are still pending.
Founded in 1958, PhRMA counts companies such as Pfizer (NYSE:PFE), Lilly (NYSE:LLY), Amgen (AMGN), Roche (OTCQX:RHHBY), GSK (GSK), J&J (JNJ) and Biogen (BIIB) as its members.
In August, the Centers for Medicare and Medicaid Services (CMS) announced the first 10 Medicare Part D drugs selected for the initial round of negotiations, which will lead to revised prices paid by the federal health program in 2026.
The list included blockbuster therapies from Bristol Myers (BMY), Pfizer (PFE), Eli Lilly (LLY), AbbVie (ABBV), Johnson & Johnson (JNJ), AstraZeneca (AZN), Novartis (NVS) (OTCPK:NVSEF), Merck (MRK), Amgen (AMGN), and Novo Nordisk (NVO) (OTCPK:NONOF).
Early this month, CMS sent initial pricing offers to companies selected for the program.