In the latest setback for the pharma industry and its allies, the United States District Court for the Southern District of Ohio dismissed a U.S. Chamber of Commerce lawsuit on the grounds of improper venue.
A federal court on Thursday dismissed the U.S. Chamber of Commerce’s lawsuit against the Inflation Reduction Act’s Drug Price Negotiation Program, handing the pharma industry and its supporters another loss in their legal challenge to the Biden administration.
Judge Michael Newman, of the United States District Court for the Southern District of Ohio, wrote in his opinion that the Chamber of Commerce—alongside its co-plaintiffs, the respective Chambers in Ohio, Dayton Area and Michigan—“do not have standing to sue in their own right.” Newman dismissed the case on the grounds of improper venue.
Over the past year, the pharma industry has filed several lawsuits seeking to block the Inflation Reduction Act’s Medicare Drug Price Negotiation Program. The allegations are broadly similar—that the program violates their constitutional rights, represents an unlawful taking of their products and breaches due process—but the cases have been filed in many different courts.
Legal experts have described this as a divide-and-conquer strategy by the drugmakers and their allied trade groups, which are looking to secure conflicting verdicts and opinions in lower courts with the goal of attracting the attention of the U.S. Supreme Court to weigh in and resolve the matter.
However, Newman appears to have seen through this tactic and refused to play into it. In his Thursday opinion, he called out the pharma industry which has “attempted to manipulate the system and manufacture standing to obtain a favorable venue.”
If his court had found that the plaintiffs had standing in this case, “it would open the door for any individual or company to bypass venue rules by becoming a member of any association remotely related to a challenged law or regulation,” Newman wrote. “The Court will not adopt a loose interpretation of the standing requirement for the purpose of forum shopping.”
Newman is not alone in his skepticism of pharma’s campaign against the Inflation Reduction Act, with several other courts have handed the industry back-to-back defeats. New Jersey District Court Judge Zahid Quraishi ruled late last month that Novo Nordisk’s participation in the drug negotiations was voluntary—a direct rejection of the company’s argument that the government was essentially forcing it to participate in the program.
Quraishi made a similar ruling in April 2024 when he handed Johnson & Johnson and Bristol Myers Squibb similar defeats in their respective lawsuits. The government is “not taking drugs from Plaintiffs,” Quraishi wrote at the time, adding that “selling to Medicare may be less profitable than it was before the institution of the Program, but that does not make [the] decision to participate any less voluntary.”
AstraZeneca, which filed its lawsuit in Delaware, also lost its case in March 2024 with Judge Colm Connolly insisting that the pharma had “no legitimate claim of entitlement to sell its drugs to the Government at any other price other than what the Government is willing to pay.”
