High-Stakes Legal Clash: DOJ and Chamber of Commerce Face Off in Ohio Court Over IRA’s Drug Price Negotiations
In a riveting courtroom battle, lawyers for the Department of Justice and the U.S. Chamber of Commerce squared off in federal court in Ohio. The stage was set for the first hearing over the Inflation Reduction Act’s (IRA) Drug Price Negotiation Program, a program that has stirred intense controversy.
The Chamber of Commerce made a bold move, seeking a preliminary injunction to halt the program before the looming October 1st deadline. This deadline marks the last chance for pharmaceutical companies to decide if they will engage in negotiations with Medicare on pricing for the first batch of ten drugs.
At the heart of the courtroom drama were two pivotal issues. First, whether the negotiation program could be deemed a price control scheme, potentially infringing on the rights of companies. Second, whether the Chamber’s members had suffered damages substantial enough to challenge the law.
Jeffrey Bucholtz, representing the Chamber and other industry heavyweights, urged Judge Michael Newman to expedite his ruling on the preliminary injunction before the October 1st deadline. The clock is ticking for drugmakers to signal their participation in these high-stakes negotiations.
The Chamber argues that the IRA has already inflicted and will continue to inflict “unrecoverable economic losses” on its members.
In a fierce rebuttal, the DOJ contended that the Chamber lacked legal standing to challenge the Drug Price Negotiation Program. They further argued that any financial harm to drug manufacturers wouldn’t materialize until 2026 when the negotiated prices would take effect.
With tensions running high, Judge Newman pledged to issue his decision “as quickly as we can,” commending the lawyers for their passionate advocacy.
Just last month, the Centers for Medicare and Medicaid Services (CMS) unveiled the first ten drugs slated for initial price negotiations. Among them are widely prescribed medications like BMS’ Eliquis, Lilly’s Jardiance, and AbbVie’s and J&J’s Imbruvica.
These selections were made by evaluating drugs with the highest gross Medicare Part D coverage, with a focus on those lacking generic or biosimilar competition. Together, these drugs have cost the government a staggering $50 billion between June 2022 and May 2023, according to CMS data.
The negotiation program aims to empower CMS to haggle over the prices of these drugs, with the ambitious goal of saving $25 billion over the next eight years.
Since President Joe Biden signed the IRA into law in August 2022, the pharmaceutical industry and its cohorts have vehemently opposed the measure. Lawsuits have proliferated, all seeking to derail the negotiation program. Powerhouse companies such as Merck, BMS, J&J, and AstraZeneca have launched separate legal offensives against the program.
Echoing the Chamber of Commerce’s stance, these companies argue that the IRA’s Drug Price Negotiation Program violates the Constitution by essentially confiscating their property without just compensation. Moreover, it compels drugmakers to accept CMS’ pricing as equitable, a move they contend violates their First Amendment rights.