Judge denies request to block

A pharmacist holds a bottle of the drug Eliquis, made by Pfizer Pharmaceuticals, at a pharmacy in Provo, Utah, January 9, 2020.

George Frey | Reuters

A federal judge on Friday declined to block the Biden administration from implementing Medicare drug price negotiations, upholding for now a controversial process that aims to make costly medications more affordable for older Americans.

Judge Michael Newman of the Southern District of Ohio issued a ruling denying a preliminary injunction sought by the Chamber of Commerce, one of the largest lobbying groups in the country, which aimed to block the price talks before Oct. 1.

That date is the deadline for manufacturers of the first 10 drugs selected for negotiations to agree to participate in the talks.

The Chamber sued the Biden administration in June, arguing that the drug negotiations violate the First and Fifth Amendments of the U.S. Constitution, as well as the separation of powers.

“As to Plaintiffs’ motion for a preliminary injunction, they have demonstrated neither a strong likelihood of success nor irreparable harm. Consequently, their request for immediate preliminary injunctive relief…is denied,” Newman, a nominee of former president Donald Trump, wrote in his 28-page order.

But Newman also declined to grant the Biden administration’s motion to dismiss the lawsuit entirely.

Instead, he asked the Chamber to amend its complaint by Oct. 13 to clarify certain details in the case.

Newman also gave the Biden administration until Oct. 27 to renew its motion to dismiss the case.

He said “a final determination on standing issues will be made following a short (60-day) discovery period and—assuming they are filed—renewed motions to dismiss.”

The ruling from Newman is a blow to the pharmaceutical industry, which views the process as a threat to its revenue growth, profits and drug innovation.

President Joe Biden’s Inflation Reduction Act, which passed in a party-line vote last year, gave Medicare the power to directly hash out drug prices with manufacturers for the first time in the federal program’s nearly 60-year history

The Chamber, which represents some companies in the industry, and drugmakers like Merck and Johnson & Johnson filed at least eight separate lawsuits in recent months seeking to declare the negotiations unconstitutional. But the Chamber’s suit was the only one seeking a preliminary injunction. 

Michael Newman, U.S. District Court Judge Ohio

Source: U.S. District Court

The Chamber’s lawsuit argues that the program violates drugmakers’ due process rights under the Fifth Amendment by giving the government the power to effectively dictate prices for their medicines.

The Chamber said an appeals court established a precedent that when the government sets prices, it must provide procedural safeguards to ensure a company receives a reasonable rate and fair return on investment. It stems from the 2001 case Michigan Bell Telephone Co. v. Engler, according to the Chamber.

The Medicare negotiations…

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