Federal court tosses Chamber of Commerce’s Medicare negotiation challenge

A federal district court Thursday threw out the U.S. Chamber of Commerce’s lawsuit challenging the Medicare Drug Price Negotiation Program established through the Inflation Reduction Act, with a judge finding that several plaintiffs in the suit lacked standing.

U.S. District Judge Michael J. Newman for the Southern District of Ohio found that the Chamber’s argument it could sue on behalf of its members through associational standing was incorrect.

“Here, Plaintiffs are Chambers of Commerce that do not have standing to sue in their own right. Instead, Plaintiffs claim to have standing under the theory of associational standing, which allows associations in some circumstances to sue on behalf of their members who have standing,” Newman wrote.

“However, three Plaintiffs — the Dayton Area Chamber of Commerce, the Ohio Chamber of Commerce, and the Michigan Chamber of Commerce — do not have associational standing and must be dismissed.”

He did find that the U.S. Chamber of Commerce had associational standing on its own but stated it would need to file a separate lawsuit in a “different venue.”

The plaintiffs had argued they could sue on behalf of a member organization, in this case the pharmaceutical company AbbVie and its subsidiary Pharmacyclics. But Pharmacyclics is based in California, and AbbVie operates in Illinois, California, Massachusetts and Washington, D.C.

“Plaintiffs have provided no information — in their amended complaint or otherwise — directly connecting the interests of Pharmacyclics or AbbVie to the business climate in the Dayton area,” Newman wrote in explaining why he believed three of the plaintiffs lacked standing.

He applied this same argument to the Ohio Chamber of Commerce and the Michigan Chamber of Commerce.

“Although Plaintiffs bring these claims to challenge Congress’s potential violation of separation of powers, the Court would transgress the very same ideal by asserting jurisdiction over this case,” wrote the judge. “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.”

The lawsuit was filed more than a year ago in June, shortly before the Centers for Medicare and Medicaid Services announced the first 10 drugs chosen for Medicare negotiation.

“We are carefully reviewing the court’s ruling and considering next steps. We support access to affordable health care,” a Chamber spokesperson said in a statement to The Hill.

“However, the price controls that we are challenging would reduce access to new medicines Americans are counting on to save and improve their lives and would set a very devastating precedent for all U.S. businesses. The Biden Administration failed to consider these important consequences in its rush to establish price controls.”

The negotiation period officially ended earlier this month on Aug. 1. The prices are scheduled to be published on Sept. 1.

Despite the mountain of legal pushback, pharmaceutical executives have been telling shareholders and analysts that the final prices won’t affect their companies’ bottom lines.

This ruling from Ohio adds to the growing list of lawsuits challenging Medicare negotiation that have gone in favor of Medicare. Similar lawsuits filed by PhRMA, Novo Nordisk, Bristol Myers Squibb, Johnson & Johnson, Boehringer Ingelheim and Astellas Pharma have also been dismissed, ruled against in summary judgement or voluntarily dismissed by the plaintiffs themselves.

Story was updated at 6:04 p.m. ET