After years of trying and failing to wipe out the law through constitutional challenges, the pharmaceutical industry's latest attack goes small, focusing on one component of one drug selected this year for the price talks.
The federal lawsuit by biopharmaceutical giant AbbVie Inc. alleges the government had no authority to select the company's Botox medication for the program, which allows Medicare officials to negotiate directly with drugmakers for lower prices for high-cost drugs as a condition to participate in Medicare.
Under the 2022 law establishing the price talks, which have faced repeated legal challenges from the pharma industry, plasma-derived products are exempt. AbbVie says Botox qualifies for the exception because a key ingredient in the medication is human serum albumin, or HSA, a protein in plasma sourced from human blood.
Experts say the company's first-of-a-kind suit signals a potential shift from big, expansive challenges to smaller, more individualized attacks on the program.
It also demonstrates drugmakers' refusal to give up the search for a winning legal strategy after a series of federal judges largely rejected the first wave of industry challenges.
"It's indicative of, 'We'll fight to the end,'" said Andrew Twinamatsiko, a director of the Center for Health Policy and the Law at Georgetown University's O'Neill Institute.
"I think it's going to be litigation after litigation until something bites," he told Law360 Healthcare Authority. "You would think, by now, the industry would have seen the writing on the wall and decided to negotiate in good faith."
Billions of dollars in annual sales give drugmakers ample incentive to keep challenging the program. Earlier this month, AbbVie reported annual net revenue of nearly $3.8 billion from Botox therapeutic products.
The "potential loss of revenue is too great and important to these companies to think that they will just give up and not continue to look for opportunities to continue to mount legal challenges to the IRA program," said Bradley Wasser, a partner at Duane Morris LLP and member of its pharmacy litigation group.
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