Pharma companies want to block Medicare drug discounts. Supreme Court weighs in
The justices' decision not to get involved leaves in place lower court rulings upholding the Medicare price negotiation program created during the Biden administration.
Maureen GroppeWASHINGTON – Pharmaceutical companies lost a bid to get the Supreme Court to block Medicare-negotiated price cuts, meaning a Biden administration program backed by President Donald Trump will continue.The court on May 18 declined to hear multiple challenges by drugmakers to the program, all of which have been rejected by lower courts.
The companies raised various legal claims, including that the Constitution requires the government to pay fair compensation when taking private property for public use. Judges ruled that companies’ participation in the program is voluntary so the Fifth Amendment’s taking clause doesn’t apply.
Drugmakers argue that that program is voluntary in name only. If they don’t participate, their drugs are taxed if they want to continue to sell them to Medicare beneficiaries.
“Contrary to its statutory name, it involves no genuine `negotiation,’” lawyers for AstraZeneca told the Supreme Court in their appeal. “The manufacturer’s only alternative is to withdraw all its drugs from Medicare and Medicaid − depriving patients nationwide of access to critical medicines and foreclosing nearly half the U.S. prescription-drug market.”
Under former President Joe Biden's 2022 climate and health legislation, called the Inflation Reduction Act, Medicare was empowered to negotiate prices with pharmaceutical companies on a limited number of medications.
Manufacturers of the first 10 drugs to go through negotiations took the deal.
But pharmaceutical companies and industry trade groups filed multiple lawsuits across the country challenging the change.
The government saved several billion dollars in the first two rounds of negotiations, according to the Centers for Medicare & Medicaid Services.
Seniors began seeing lower prices in January for the first 10 drugs to go through the program. The drugs include treatments for cancer, heart disease, autoimmune conditions and diabetes.
Medicare enrollees will save an average of more than 50% on out-of-pocket costs for these drugs under their insurance plans, according to an AARP analysis published in December.
Negotiated prices for an additional 15 drugs – including the popular GLP-1 diabetes and obesity drugs Ozempic and Wegovy – kick in next year.
Contributing: Ken Alltucker