The Pharmaceutical Research and Manufacturers of America alleged in the lawsuit that the “most favored nation” (MFN) pilot for Medicare, called GLOBE, is unlawful and exceeds the statutory authority of the Centers for Medicare and Medicaid Services.
PhRMA argued that CMS is using a limited demonstration model authority to impose “nationwide price setting policies that Congress never authorized.”
“The policy doesn’t make medicines more affordable for most beneficiaries, while putting future medical innovation and patient access at risk,” Stephen J. Ubl, president and CEO of PhRMA, said in a statement. “We share the administration's goal of ensuring Americans can access and afford their medicines, but CMS cannot rewrite the law and bypass Congress to impose foreign price controls.”
The complaint, filed in federal district court in the District of Columbia, asks the court to declare GLOBE unlawful and to vacate the rule in its entirety.
“If allowed to move forward, GLOBE will work immediate and profound harms on American patients and American industry,” the lawsuit states.
Under the rule, drug manufacturers would be required to pay “rebates” to CMS that effectively limit Medicare drug prices to MFN benchmarks based on prices in 19 countries.
The pilot itself isn’t expected to have much of an impact because the administration exempted all but three or four companies in return for their agreement to charge most favored nation prices in Medicaid.
But PhRMA isn’t calling the Medicaid deals “price controls.” The industry group says voluntary agreements are fine, but mandatory participation is not.
PhRMA argues GLOBE is not a test of new or innovative ways to deliver care or pay providers. Instead, they claim CMS is imposing a new pricing requirement that “predetermines the outcome through mandatory manufacturer rebates.”
In the final rule, CMS nodded to the possibility of lawsuits.
“Disagreement with payment policy does not establish a constitutional violation,” the agency wrote.
