Chamber of Commerce urges judges to dam Medicare drug negotiations

The US Chamber of Commerce seal will be displayed during the restoration at the Washington, DC headquarters

Andrew Harrer | Bloomberg | Getty Images

The U.S. Chamber of Commerce on Wednesday asked a federal judge in Ohio to block Medicare’s new powers to negotiate drug prices before Oct. 1.

The request for an injunction represents a significant escalation in the pharmaceutical industry’s litigation against Medicare and would halt talks before they begin in the fall.

Health and Human Services Minister Xavier Becerra will publish by September 1st a list of ten expensive drugs that will be selected for negotiations. The drugmakers will then have to decide whether to sign agreements to participate in the talks by October.

The US Chamber and local chambers of commerce in Dayton, Ohio and Michigan sued Medicare in federal court in the Southern District of Ohio in June. They argued that the drug trials violated the First and Fifth Amendments of the US Constitution and the separation of powers.

The chamber ordered Judge Thomas Rose on Wednesday to block the hearings before they begin because they violate the due process clause.

drug manufacturer Abbvie, a member of the US Chamber and the Dayton, Ohio District Chamber, fears his blood cancer drug Imbruvica will be selected for trials this fall. Imbruvica generated $4.6 billion in revenue last year, which accounts for about 8% of the company’s total revenue.

The board argued in its Wednesday motion that the HHS secretary has “free rein to set prices unilaterally” without regulatory or judicial review.

The chamber said the Sixth Circuit Court of Appeals set a precedent that the government must provide procedural safeguards when setting prices to ensure a company receives a fair price and a fair return on capital. That precedent dates back to the 2001 case Michigan Bell Telephone Co. v. Engler, the chamber’s attorneys said.

Medicare drug price negotiations lack these protections and set price caps well below a drug’s market value, attorneys for the board said.

Abbvie chief executive Michael Staff said in a court statement on Wednesday that the drugmaker would suffer acute, tangible and irreparable harm if the company had to sign an agreement to participate in the negotiations on Oct. 1.

Businesses must begin submitting information to the HHS Secretary beginning October 2. Employees said this includes proprietary information and trade secrets such as research and development costs, market data and production costs.

Merck, Bristol Myers Squibband Pharmaceutical Research and Manufacturers of America have also sued Medicare in multiple federal courts across the United States over drug price negotiations

HHS and the White House have vowed to defend the program in court, arguing that there is nothing in the Constitution that prevents Medicare from negotiating lower drug prices for seniors.

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