Will the Medicare Price Negotiation Revamp Sufficiently Appease Pharma Companies?

July 10, 2023

The Centers for Medicare & Medicaid Services (CMS) amendments to its drug pricing negotiation program will unlikely deter past, current, and future industry legal challenges. The CMS recently released a highly-anticipated strategy for setting and negotiating prescription drug prices after going through 7,500 comments. The initiative has encountered legal challenges from entities like Merck & Co, the US Chamber of Commerce, PhRMA, and Bristol Myers Squibb Co. They contend that it undermines drug innovation and patient welfare by vesting too much authority in the federal government. Regardless of amendments to enhance transparency and confer more decision-making power to companies, several legal experts foresee additional lawsuits.

Moreover, lawyers argue that the CMS is more susceptible to litigation because of the program’s tight deadline. The CMS maintained that the adjustments were necessary for launching a new program in less than a year. Nevertheless, substantial legal and policy issues still need to be solved, and the absence of well-defined standards for product evaluation remains a persistent problem. In sum, critics argue that drug prices’ lack of accountability and discretion will discourage future investment. Despite these challenges, the CMS has consistently defended the program.

Source: Bloomberg Law, July 7th, 2023

What We’re Reading to Learn More: 

  • Merck sues US government to halt Medicare drug price negotiation, Reuters
  • Bristol Myers Squibb sues Biden administration over Medicare drug negotiations in third such lawsuit, CNBC
  • Chamber of Commerce Files IRA Lawsuit Against Biden Administration, Follows Merck, BioSpace
  • PhRMA joins legal battle over Inflation Reduction Act’s ‘price-setting’ measures, Fierce Pharma

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