Trump’s ‘most-favored nation’ drug pricing scheme faces lawsuits

Almost immediately after President Trump indicated he planned on tying Medicare reimbursement for dozens of drugs to lower rates in other countries, it seemed certain that legal action was inevitable.  

Now, Trump’s executive orders related to drug pricing are attracting a growing number of lawsuits. Earlier this month, the Pharmaceutical Research and Manufacturers of America (PhRMA), the Association of Community Cancer Centers (ACCC), the Global Colon Cancer Association (GCCA) and the National Infusion Center Association (NICA) filed a lawsuit in the U.S. District Court for the District of Maryland regarding the rule. 

The lawsuit demands urgent action to “stop a legally deficient, wholesale transformation of the Medicare program via interim final regulation that will cause immense, irreparable harm to patients, healthcare providers, and pharmaceutical manufacturers.”  

The Biotechnology Innovation Organization, California Life Sciences Association and Biocom California have filed a similar lawsuit in a California federal court suit. 

On Dec. 11, the Community Oncology Alliance and Regeneron Pharmaceuticals (NSDQ:REGN) also filed lawsuits in New York federal court and Washington, D.C., respectively. 

The drug-pricing scheme is set to go into effect on Jan. 1, 2021. 

The PhRMA-backed suit argues that CMS does not have the statutory authority to enforce the rule. The organization explained in a statement that the rule “raises serious constitutional questions and improperly fails to follow required rulemaking procedures.” 

The Community Oncology Alliance and Regeneron also maintain that the rule was finalized without proper notice and a public comment period described in the Administrative Procedure Act. 

CMS maintains in a document explaining the rule that the policy will “control unsustainable growth in Medicare Part B spending without adversely affecting quality of care for beneficiaries.”

Several of the organizations attempting to block enforcement of the rule argue otherwise. The Community Oncology Alliance, for instance, described the policy in its complaint as “a dangerous and unlawful gamble with the lives of some of America’s sickest and oldest cancer patients who require chemotherapy, immunotherapies, and other potentially life-saving drugs.” The group also maintains that the pricing scheme would force oncologists to “administer therapies that will be reimbursed at a rate that is significantly less than the cost of those therapies.” 

While President Trump has asserted that the pharmaceutical industry is “getting away with murder,” he has also extolled the industry’s promise in battling the COVID-19 pandemic. Trump has, for instance, described an antibody cocktail as a COVID-19 “cure.” He has also touted the vaccine from Pfizer (NYSE:PFE) and BioNTech (NSDQ:BNTX) as a “medical miracle.”