MEMO: Where Big Pharma’s Fight to Keep Price Gouging Seniors Stands in the Courts

To: Interested Parties

From: Tony Carrk, Executive Director of Accountable.US

RE: Where Big Pharma’s Fight to Keep Price Gouging Seniors Stands in the Courts 

Date: August 13, 2024

This week, the Biden-Harris administration will announce final negotiated prices Medicare negotiated under the Inflation Reduction Act. This is the first time in history Medicare has been able to use its authority to lower prescription drug costs for seniors. And the big drug companies do not like it. 

How do we know? First, big drug companies and their allies tried everything it could to stop the Inflation Reduction Act from becoming law. Two years ago, the pharmaceutical industry spent nearly $400 million in lobbying alone, not to mention their campaign contributions and aggressive public misinformation strategies.

But big drug companies did not stop after it passed. They doubled down and turned their attention to the courts. Thankfully, most judges have ruled against these meritless lawsuits, but given their relentless opposition, big drug companies will continue to find ways to protect their profits at all costs. Here is what you need to know about Big Pharma and their allies’ legal offensive to keep prices high for seniors.

BIG PHARMA HAS LOST SIX OF THE NINE LAWSUITS IT FILED SO FAR

Pharmaceutical giants Bristol Myers Squibb, AstraZeneca, and Novo Nordisk, alongside big-business allies like the Chamber of Commerce and PhRMA, have flooded our court system with frivolous lawsuits to challenge Medicare’s authority to negotiate prices. They’ve filed 9 lawsuits in 8 jurisdictions and are appealing to the higher courts—prolonging the legal process in the name of profits and spending.  

• The US District Court for the District of Delaware ruled against AstraZeneca Pharmaceuticals LP, affirming Medicare’s negotiation authority. AstraZeneca is appealing the case in the Third Circuit Court of Appeals. 
• The US District Court for the Western District of Texas threw out a lawsuit by the Pharmaceutical Research and Manufacturers of America (PhRMA)—the largest trade group representing pharmaceutical companies—citing lack of standing. PhRMA is appealing the decision in the conservative Fifth Circuit Court of Appeals. 
• The New Jersey District Court rejected Novo Nordisk’s challenge to the Inflation Reduction Act earlier this month. They have vowed to appeal the decision. 
• A New Jersey District Court also rejected Bristol Myers Squibb and Janssen’s (Johnson and Johnson) challenge. The companies have since appealed the decision in the Third Circuit Court of Appeals. 
• A federal judge in the U.S. District Court of Connecticut ruled against Boehringer Ingelheim’s challenge—the company failed to convince the judge the law was unconstitutional on any of the four points they sued on. They have since appealed the decision. 
• Just last week, the U.S. Chamber of Commerce’s case against the program was tossed out due to lack of standing. The Chamber has a sinister history of judge shopping on behalf of their big business allies. 

BIG PHARMA CEOS BRAG ABOUT PROFITS WHILE SUING TO KEEP COSTS HIGH FOR SENIORS

Faced with the Biden-Harris administration’s efforts to lower prescription costs for millions of Americans, Big Pharma CEOs are only concerned with their excessive profits and pay, sometimes resorting to lies and half-truths to justify their lawsuits. 

Johnson & Johnson CEO Joaquin Duato claimed that Medicare’s new negotiation authority would have “a chilling” and “detrimental effect” for pharmaceutical companies’ ability to “invest in R&D and to develop new medicines,” — a claim belied by the facts showing the industry’s R&D investments pale in comparison to investor giveaways and political spending. And before stepping down as Bristol Myers Squibb CEO, Giovanni Caforio penned an opinion piece in The Wall Street Journal claiming the IRA’s Medicare drug price negotiation provision would lead to the development of fewer drugs—again, a claim strained by the industry’s wasteful spending priorities. 

Likewise, Merck President and CEO Robert M. Davis claimed the IRA would “damag[e]” the pharmaceutical industry, dramatically calling it “price setting” and “misguided.” 

BIG PHARMA HAS GIVEN MILLIONS TO GROUPS THAT HAVE FILED AMICUS BRIEFS SUPPORTING THEIR CAUSE

After their lawsuits were tossed out in federal court, AstraZeneca, Bristol Myers Squibb, and Janssen’s industry pals filed amicus briefs before the Third Circuit Court of Appeals on their behalf, including groups like the Washington Legal Foundation, Manhattan Institute, Biotechnology Innovation Organization, and Alliance for Aging Research. While these filers dressed up their support for industry with supposedly neutral concerns about constitutionality and echoed debunked claims about harm to innovation, they failed to mention they had collectively taken nearly $4.8 million from PhRMA since 2019. 

At its core, this is an industry fighting tooth and nail to keep the power to charge whatever they want for whatever reason they want. The American people are sick and tired of paying higher prices to pad CEO profits at their own expense. We are glad the courts have ruled in favor of consumers so far, but we must remain vigilant. We know big drug companies will be.