The Pharmaceutical Research and Manufacturers of America (PhRMA), the US pharmaceutical industry’s main lobbying group, has sued the Trump administration over a new Medicare rule designed to lower the prices the government pays for certain hospital-administered medicines.
The lawsuit, filed on Wednesday, October 7, in the US District Court for the District of Columbia, challenges the administration’s GLOBE rule, which would link Medicare Part B drug prices to prices paid in a group of comparable countries.
PhRMA argues that the Centers for Medicare & Medicaid Services (CMS) exceeded its legal authority by using a programme intended to test new payment models to effectively change Medicare’s drug-pricing system without congressional approval.
The administration maintains that CMS has the authority to conduct the pricing experiment under existing law. The programme is scheduled to begin on January 1 and is expected to cover only a small number of drugmakers because companies that have reached separate pricing agreements with the White House can be exempted.
The government has also sharply reduced its estimate of the programme’s potential savings. HHS now expects the model to cut Medicare Part B spending by about $440 million over seven years, down from an earlier projection of $11.9 billion.
The lawsuit is not PhRMA’s first legal challenge to similar pricing policies. In 2020, the group successfully challenged an earlier version of a most-favored-nation drug-pricing rule, which was struck down on procedural grounds.
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