A spokesperson for the U.S. Chamber of Commerce, which sought the injunction alongside local and state chambers, said the group is reviewing the decision.
Newman asked the Chamber, which challenged the program with state and local chambers of commerce, to amend its complaint to name which member companies of two of those groups would be affected by the program. He also asked the Chamber to clarify whether AbbVie, the member company it cited in its lawsuit, actually manufactures Imbruvica, a cancer drug chosen for negotiation.
Justice Department lawyers had argued that Pharmacyclics, a subsidiary wholly owned by AbbVie, is the primary maker of the drug and holder of the FDA approval and is the company that would negotiate with CMS.
Newman denied DOJ’s motion to dismiss to give the chambers the chance to address his concerns, though the government can refile.
The Chamber was the only group among lawsuits by six drugmakers and one major pharma trade group that had sought an injunction to block the drug pricing program. It had asked the court to rule by Oct. 1, when drugmakers either have to agree to participate in negotiations or choose between withdrawing all of their products from Medicare or facing steep excise taxes. Both of the latter choices would prove costly to most drugmakers.
The lawsuit, which was joined by state and local chambers of commerce, argues that the Inflation Reduction Act violates the First, Fifth and Eighth amendments of the Constitution. The chambers say the program, which represents a key provision of the IRA, would force them to echo the government’s “favored viewpoints” about so-called fair prices, violate their due process rights and impose “excessive fines” as disproportionate punishment for not complying with CMS’ final price on selected drugs.
DOJ countered in legal filings that the Chamber and its members can’t show imminent harm from the program and asserted that the plaintiffs were speculating about who might be subject to negotiation, since the lawsuit was filed before CMS published its list on Aug. 29 of the first 10 drugs subject to negotiations.
Government lawyers also questioned whether the Chamber had standing to bring its case.
Six drugmakers and PhRMA, the major lobbying group for brand-name drugs, have filed lawsuits in different federal district courts across the nation, challenging the program in an apparent bid to draw conflicting opinions and advance the issue to the Supreme Court as soon as possible.
Four companies — Merck, Boehringer Ingelheim, AstraZeneca and Bristol Myers Squibb — have publicly said they will participate in negotiations. Companies are not required to announce their decision to opt into the program.
What’s next: The Chamber must file an amended complaint by Oct. 13. DOJ would then have until Oct. 27 to renew its motion to dismiss.