On Monday, the Biden administration got an early victory in pharma’s legal challenge to the Inflation Reduction Act, with a Texas judge dismissing a complaint from the Pharmaceutical Research and Manufacturers of America.
Pictured: The inside of a federal courtroom/iStock, mstroz
A federal district judge in Texas on Monday dismissed a lawsuit from the industry lobby Pharmaceutical Research and Manufacturers of America, which is seeking to block the implementation of the Inflation Reduction Act’s Drug Price Negotiation Program.
In a 14-page ruling, Senior U.S. District Judge David Alan Ezra argued that the National Infusion Center Association (NICA)—one of the plaintiffs—did not have standing because it does not manufacture or market medicines that would be affected by the Medicare negotiation program.
With NICA—the only plaintiff based in Texas—removed from the equation, Ezra ruled that the lawsuit is now in an improper venue.
“Venue is only proper in the Western District of Texas because NICA resides here,” Ezra wrote, adding that “with NICA dismissed, no defendant would reside in this district, no plaintiffs reside in this district, and nothing suggests that a substantial part of the events or omissions giving rise to the claim occurred in this district.”
The plaintiffs also failed to establish why the venue would still be proper in case of NICA’s disqualification, and neither party offered another venue to transfer to.
Pharmaceutical Research and Manufacturers of America (PhRMA) spokesperson Nicole Longo in a statement to Axios said that the trade group is “disappointed” with the court’s ruling, adding that the dismissal based on venue “does not address the merits of our lawsuit.” The group said it is currently evaluating potential next legal steps.
PhRMA filed its lawsuit in June 2023 alongside co-plaintiffs NICA and the Global Colon Cancer Association. In their complaint, the organizations alleged that the Inflation Reduction Act (IRA) forces companies to accept government-dictated prices without setting any “meaningful constraints” on these “price-setting powers.”
Monday’s court dismissal is an early victory for the Biden administration, which seeks to generate some $25 billion in drug cost savings annually via the IRA. To achieve this goal, the Centers for Medicare and Medicaid Services is currently negotiating the prices for some of the most widely prescribed medicines, including BMS’s Eliquis (apixaban), Amgen’s Enbrel (etanercept) and AstraZeneca’s Farxiga (dapagliflozin).
Despite the dismissal of PhRMA’s complaint, the Biden administration still has several other lawsuits to fend off including one from Merck, which kicked off the industry’s legal challenge to the IRA in June 2023. It has since been joined by several other pharma companies, including BMS, AstraZeneca and J&J.
Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
