Texas Judge Hands Joe Biden Big Win

A federal judge in Austin, Texas, has thrown out a lawsuit brought by pharmaceutical industry bodies challenging a new program that allows the government to negotiate prices for some expensive drugs under Medicare.

On Monday, U.S. District Judge David Ezra, appointed by Ronald Reagan, sided with the Biden administration in dismissing a lawsuit by the Pharmaceutical Research and Manufacturers of America (PhRMA) group and two others that claimed the program was unconstitutional.

Under the initiative, passed under the Inflation Reduction Act, the Department of Health and Human Services is directed to seek lower fixed prices for certain drugs, saving government funds on serving Medicare patients.

But pharmaceutical companies that refuse to participate in the scheme would either have to pay large fines or withdraw from Medicare—which covers 66 million, mostly older, Americans who account for a large share of prescription spending.

PhRMA, the Global Colon Cancer Association and the National Infusion Center Association had argued that the program would unconstitutionally levy excessive fines, which could range from over 185 percent to 1,900 percent of a drug’s price depending on the duration of noncompliance and would be based on the drug’s total sales including those beyond Medicare.

While Ezra had agreed that the program could possibly do harm to the companies in earlier rulings, he granted the government’s motion to dismiss on Monday because the claims brought against it arose under the Medicare Act—meaning they could only be heard by a court after an administrative review.

“We are disappointed with the court’s decision, which does not address the merits of our lawsuit, and we are weighing our next legal steps,” PhRMA spokesperson Nicole Longo told Reuters following the ruling.

This is a developing story and will be updated with further details.