HHS ham­mers in­dus­try's at­tempt to de­lay new drug price ne­go­ti­a­tions

Lawyers for HHS on Fri­day sharply crit­i­cized the US Cham­ber of Com­merce’s at­tempt to stall the im­ple­men­ta­tion of new drug pric­ing ne­go­ti­a­tions, set to be­gin on Sept. 1.

While call­ing the busi­ness lob­by­ing group’s claims “hy­per­bol­ic,” the US gov­ern­ment lawyers said the cham­ber is es­sen­tial­ly try­ing to do in court what it failed to do while lob­by­ing Con­gress over the In­fla­tion Re­duc­tion Act that set up these ne­go­ti­a­tions.

The cham­ber and oth­er drug­mak­ers have spent the last few months su­ing HHS and CMS over the in­com­ing ne­go­ti­a­tions, say­ing they’re lit­tle more than un­con­sti­tu­tion­al price con­trols that need to be stopped be­fore they do re­al dam­age on bio­phar­ma in­no­va­tion. But HHS’ lawyers say their le­gal the­o­ry “lacks mer­it,” ac­cord­ing to the lat­est fil­ing in the Dis­trict Court for the South­ern Dis­trict of Ohio.

“This sta­tus quo is un­sus­tain­able; the IRA seeks to cor­rect course,” HHS lawyers wrote, adding:

As a thresh­old mat­ter, the Ne­go­ti­a­tion Pro­gram cur­rent­ly im­pos­es no le­gal oblig­a­tions on any drug man­u­fac­tur­er what­so­ev­er. The list of up to 10 drugs that will be se­lect­ed for the first round of price ne­go­ti­a­tions has not yet been fi­nal­ized; that list will be an­nounced in a few weeks, by Sep­tem­ber 1, 2023. And even if a drug man­u­fac­tured by one of Plain­tiffs’ mem­bers is se­lect­ed, that will not retroac­tive­ly cure this de­fect in the com­plaint.

HHS lawyers al­so say the cham­ber lacks the stand­ing to make such claims on be­half of the bio­phar­ma in­dus­try, telling the court to dis­miss these claims and its call to halt the leg­is­la­tion’s im­ple­men­ta­tion.

Last month, the Cham­ber of Com­merce called on this same court to halt CMS’ on­go­ing process­es while the var­i­ous law­suits play out, af­ter fil­ing two oth­er suits, in ad­di­tion to suits from Mer­ck, Bris­tol My­ers Squibb, Janssen, Astel­las and oth­ers too.

The court fil­ings come about two weeks be­fore CMS is ex­pect­ed to an­nounce the first 10 drugs that will have to sub­mit to the ne­go­ti­a­tion process or face steep penal­ties on Sept. 1.