The pharmaceutical industry's top lobby group Pharmaceutical Research and Manufacturers of America (PhRMA) sued the Trump administration on Wednesday to invalidate its "most-favored-nation" drug pricing rule for Medicare, arguing the rule is illegal government overreach.
The suit was filed in the U.S. District Court for the District of Columbia. Defendants include Health Secretary Robert F. Kennedy Jr., the Department of Health and Human Services (HHS), the Centers for Medicare & Medicaid Services (CMS), CMS Administrator Dr. Mehmet Oz and Abe Sutton, who directs the CMS innovation center.
What the GLOBE Rule Does
The GLOBE rule, finalized last week, would use drug prices in economically comparable countries to calculate Medicare Part B rebates for certain drugs, effectively lowering the amount Medicare pays for eligible drugs.
The rule is expected to have limited reach. CMS plans to waive it for manufacturers that signed voluntary pricing deals with the White House.
Pfizer Inc. (NYSE:PFE), Eli Lilly and Co. (NYSE:LLY) and Novo Nordisk A/S (NYSE:NVO) are among more than two dozen drugmakers with Trump-signed deals.
PhRMA Says CMS Overstepped Its Authority
In the final rule, HHS cut its projected Medicare Part B net spending savings to $440 million over seven years, a 96% drop from the $11.9 billion in the proposed rule.
PhRMA argues CMS is stretching Section 1115A of the Social Security Act, which lets it test payment models, to rewrite Medicare drug pricing without Congress. GLOBE is not a true test, the complaint says, because "the results are preordained." It adds that Congress, "unlike CMS, has decided that [most-favored-nation]-based price controls do not serve the national interest."
Department of Health and Human Services did not immediately respond to MarketDash's request for comment.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by MarketDash editors.
