Chamber of Commerce files motion for preliminary injunction on Medicare drug negotiation

The U.S. Chamber of Commerce, one of the largest lobbying groups in the country, filed a motion Wednesday for a preliminary injunction to block the implementation of the Medicare Drug Price Negotiation program established by the Inflation Reduction Act (IRA), which is currently facing an onslaught of legal challenges.

The Chamber filed a lawsuit challenging the constitutionality of the program last month, claiming it violated the First, Fifth and Eighth Amendments. This suit was one of several filed by those within the drug industry, including the trade group PhRMA, Merck & Co. and Bristol Myers Squibb.

While those familiar with these lawsuits have so far said they were not coordinated, the organizations likely shared a motivation to block the program before negotiations got too far underway.

Negotiations are set to take place during 2023 and 2024. The first 10 drugs eligible for price negotiation will be announced at the start of September, less than two months away. Now it seems the Chamber is eager to stop the implementation of the program altogether while it’s debated in court.

“We’re seeking timely relief before the government can further implement its illegal and arbitrary price control scheme. If allowed to go into effect, the scheme would harm not only U.S. businesses but U.S. patients — limiting access to medicine, deterring needed investment, and stifling innovation,” Andrew Varcoe, deputy chief counsel at the U.S. Chamber Litigation Center, said in a statement.

While the Chamber itself is not a drugmaker, it is suing on behalf of its members that are in the industry. In its memorandum filed Tuesday, the group said its members would be “irreparably harmed” without an injunction.

“The IRA is already causing irreparable harm to Plaintiffs’ members because it is causing them, and will continue to cause them, to suffer unrecoverable economic losses,” the Chamber stated.

Common complaints in the suits filed against the program are claims that it provides the Department of Health and Human Services (HHS) with a disproportionate degree of unchecked power and essentially coerces drugmakers to comply under the threat of excise taxes or bad publicity.

However, while companies say they feel they have no choice but to engage in the program, legal experts have noted that the program is ultimately voluntary and companies have the freedom to disagree with the negotiations and walk away.

Seemingly in response to the slew of lawsuits, the Biden administration revised the drug negotiation program last month to clarify how the administration planned to carry it out and choose which drugs were to be negotiated.

The administration stated that companies would be allowed to “expedite” the termination of their relationship with Medicare, a lucrative income source, and also be able to avoid the excise tax with proper notice to the government.

The plaintiffs in the case were less than impressed by the revisions, with PhRMA saying they offered “very few substantive changes.”

While the drugs that will be negotiated have yet to be announced, data suggests the savings could potentially be vast. The Congressional Budget Office estimated earlier this year that the program could reduce the budget deficit by $25 billion in 2031.

A KFF analysis released Wednesday found that the 10 top-selling prescription drugs under Medicare Part D only accounted for one percent of all covered drugs in 2021 but represented 22 percent — $48 billion — of gross Medicare Part D drug spending. All of the 10 top-selling drugs were brand-name products like Eliquis and Ozempic.

“While the drug price negotiations begin modestly with 10 drugs in the first year, KFF’s research shows that even a relatively small number of drugs can command a substantial share of spending in Medicare,” the organization said in its analysis.