Chamber of Commerce Loses Bid to Challenge Medicare Drug Price Negotiation

The judge said the Chambers of Commerce ‘attempted to manipulate the system and manufacture standing to obtain a favorable venue.’

The U.S. Chamber of Commerce building in Washington on May 10, 2021. Andrew Kelly/Reuters

A federal district judge in Ohio on Thursday dismissed the U.S. Chamber of Commerce’s lawsuit challenging the constitutionality of a program that enables Medicare to negotiate prices with drugmakers for selected drugs.

The ruling named the Dayton Area Chamber of Commerce, the Ohio Chamber of Commerce, the Michigan Chamber of Commerce, and the U.S. Chamber of Commerce as plaintiffs in the case.

In his ruling, U.S. District Judge Michael Newman in Ohio’s Southern District said all the plaintiffs, except for the U.S. Chamber of Commerce, lacked associational standing in the case and must be dismissed.

Newman said that although the U.S. Chamber of Commerce had associational standing to sue on behalf of its members, it would need to file suit “in a different venue.”

“Because this case was filed in the Southern District of Ohio based on the presence of the dismissed Plaintiffs, the Court dismisses this case without prejudice due to improper venue,” the judge stated.

The business groups filed the lawsuit against the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Service (CMS) in June to challenge the program established through the Inflation Reduction Act (IRA).

The plaintiffs argued they had standing to bring the suit because the pharmaceutical company AbbVie and its subsidiary Pharmacyclics were members of the groups. Pharmacyclics is the developer of cancer drug Imbruvica—one of the 10 drugs chosen for the program.

But the court emphasized that Pharmacyclics is based in the Bay Area, California, while AbbVie’s offices are in Illinois, California, Massachusetts, and the District of Columbia.

‘Forum Shopping’

Newman stated that the plaintiffs failed to provide information that directly connected the interests of Pharmacyclics or AbbVie to the business climate in the Dayton area.

“Pharmacyclics and AbbVie are large pharmaceutical companies that could have sued on their own in a federal court in a different state. Instead, Plaintiffs have attempted to manipulate the system and manufacture standing to obtain a favorable venue,” he said.

“If the Court found the Dayton Area Chamber of Commerce 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,” the judge wrote. “The Court will not adopt a loose interpretation of the standing requirement for the purpose of forum shopping.”

The Epoch Times contacted to the U.S. Chamber of Commerce for comment.

The lawsuit claimed that the price negotiation program violated America’s constitutional requirements by giving an administrative agency “unfettered discretion to impose arbitrary prices.”

“There is no way for manufacturers to avoid the sham ‘negotiation’ process or the agency-imposed price controls,” the suit stated.

“If a manufacturer has one drug selected by HHS for ‘negotiation,’ it has no legal avenue to remove the drug from Medicare and Medicaid and thereby avoid the price control regime,” it added.

Under the Inflation Reduction Act, signed into law by President Joe Biden in 2022, Medicare has the authority to directly negotiate prescription drug prices with drug companies.

The negotiation cycle will involve roughly six months of discussions between the manufacturers and the federal CMS with the final negotiated prices set to take effect in 2026.

The 10 drugs selected for price negotiations treat a wide range of health conditions, including heart disease, heart failure, blood clots, certain cancers, chronic kidney disease, diabetes, and autoimmune diseases.

Katabella Roberts contributed to this report.