Court Dismisses PhRMA Lawsuit Challenging IRA

Today, the district court for the Western District of Texas granted the government’s motion to dismiss the lawsuit brought by PhRMA and other organizations challenging the Drug Price Negotiation Program of the Inflation Reduction Act.  The lawsuit was brought by three Plaintiffs: PhRMA, the Global Colon Cancer Association, and the National Infusion Center Association (“NICA”).  The government filed a motion to dismiss the lawsuit last August, arguing that NICA should be dismissed for lack of subject-matter jurisdiction, and that upon NICA’s dismissal the case should be dismissed for lack of venue because NICA is the only party with any relevant connection to the Western District of Texas.

In its opinion, the court found that Plaintiffs’ claims “arise under” the Medicare Act and therefore cannot be reviewed under federal question jurisdiction unless they have been presented to the agency and administrative remedies have been exhausted.  The court also found that Plaintiffs did not meet the narrow exception allowing for federal-question jurisdiction of claims for which “channeling…through the agency would result in ‘complete preclusion of judicial review’” because they can bring their constitutional challenge to HHS.  The court then held that with NICA dismissed, venue in the Western District of Texas would be improper.  As “[n]either party offered a transferee venue,” and “[m]ore importantly, the same federal jurisdictional defect likely exists for PhRMA and GCCA, as nothing suggests that either party has presented its claims to the Secretary,” the court dismissed the case (without prejudice) and ordered the case closed.

The dismissal of the PhRMA case leaves eight pending litigations challenging the Drug Price Negotiation Program of the IRA:

  1. Merck & Co., Inc. v. Becerra et al.  (D.D.C., Case No. 1:23-cv-1615)
  2. Dayton Area Chamber Of Commerce et al. v. Becerra et al. (S.D. Ohio, Case No. 3:23-cv-156)
  3. Bristol Myers Squibb Co. v. Becerra et al. (D.N.J., Case No. 3:23-cv-3335)
  4. Janssen Pharms., Inc. v. Becerra et al. (D.N.J., Case No. 3:23-cv-3818)
  5. Boehringer Ingelheim Pharms., Inc. v. HHS et al. (D. Conn., Case No. 3:23-cv-1103)
  6. AstraZeneca Pharmaceuticals LP v. Becerra et al. (D. Del., Case No. 1:23-cv-00931)
  7. Novartis Pharmaceuticals Corp. v. Becerra et al. (D.N.J., Case No. 2:23-cv-14221)
  8. Novo Nordisk, Inc. et al. v. Becerra et al. (D.N.J., Case No. 3:23-cv-20814)

In the AstraZeneca case, the court (D. Del., J. Connolly) recently heard oral argument on the parties’ pending motions for summary judgment.  The court has since ordered the parties to submit supplemental briefing “addressing whether Plaintiffs have standing to assert” their due process claim.  The court previously entered a schedule granting AstraZeneca’s request for a decision on the parties’ dispositive motions on or before March 1, 2024—the day before AstraZeneca must respond to CMS’s initial “maximum fair price” proposal.

In the BMS, Janssen, Novartis, and Novo Nordisk cases, which are all pending before Judge Quraishi in the District of New Jersey, the court has ordered the parties to meet and confer on a date and schedule for oral argument on the motions for summary judgment pending in those cases.  The court noted it has availability from March 5, 2024 through March 8, 2024.

For more information and background on the various pending legal challenges to the Inflation Reduction Act, please visit our IRA Resource Page and check out our previous posts here and here.