Drugmakers Tap Big Law Attorneys to Fight Medicare Price Program

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Major drugmakers have assembled an army of top attorneys from the nation’s most prestigious firms to take down Medicare’s drug price negotiation program, hoping to take advantage of experience gained in health litigation, arguments before the Supreme Court, and policymaking inside the federal government.

The attack on the drug negotiation program marks the latest attempt by industry to throw everything it has into cutting down a federal health program. Attorneys have noted the fight against the Affordable Care Act as a similar example of industry unifying against the government as it tries to revamp long-standing practices in health care. In doing so, legal experts note that hiring superstar lawyers from the nation’s leading law firms is a must.

Jones Day, King & Spalding and Covington & Burling LLP are among the major law firms behind seven lawsuits by drugmakers and major trade groups trying to block the Biden administration’s unprecedented drug price negotiation plan from going into effect. About 40 attorneys at different law firms are working on all of these cases.

The attorneys include a former solicitor general, Supreme Court clerks and Justice Department officials, comprising what legal experts consider to be a formidable front for taking down a complex government initiative.

The companies are leaning on their outside law firms’ “heavy hitters” said Andrew Twinamatsiko, associate director of the Health Policy and the Law Initiative at Georgetown University’s O’Neill Institute.

“These are billion-dollar companies, and they’re able to afford the highest paid attorneys who have litigated before different courts, all the way to the Supreme Court,” Twinamatsiko said.

Merck & Co. Inc., Bristol-Myers Squibb Co., Astellas Pharma Inc., Johnson & Johnson, and Boehringer Ingelheim have filed lawsuits thus far. More could follow after Medicare publishes by Sept. 1 its list of the first 10 prescription drugs that will face negotiated prices starting in 2026.

The Pharmaceutical Research and Manufacturers of America and US Chamber of Commerce filed their own separate suits, arguing that the drug pricing program is unconstitutional. The Biden administration has promoted the program as a landmark policy aimed to lower both Medicare spending and Americans’ prescription drug costs.

Medicare spent $216 billion in 2021 buying medications, according to a KFF analysis. The drug price negotiation program was created with the 2022 enactment of the Inflation Reduction Act.

“Drug manufacturers lobbied hard against legislative efforts to seat the Secretary at the negotiating table. And now that their lobbying failed, manufacturers and interest groups have run to court, filing multiple suits around the country challenging the statute on its face,” said Department of Justice attorneys, on behalf of the Centers for Medicare & Medicaid Services in a motion in the US District Court for the Southern District of Ohio opposing the US Chamber’s request to pause the program.

The DOJ attorneys said the plaintiffs in this case and their motions fail “at every step.”

Now, as the pharmaceutical industry uses everything in its power to block Medicare from negotiating what they pay for some of their costliest drugs, their legal teams are on the line to persuade the courts to see things their way.

Attorneys on the cases are “considered to be among the best of the best,” Jeff Lowe, principal and managing partner at law firm adviser group Jeffrey Lowe Partners LLC.

High Court Familiarity

In fighting the negotiation program, drugmakers primarily argue the law violates the First, Fifth and Eighth Amendments and the nondelegation doctrine.

These arguments are “nothing new,” Twinamatsiko said, noting that industries often turn to big-hitting firms to leverage similar constitutional arguments against the government. He likens the play to “new wine and old wineskins.”

For example, he said, Jones Day—whose attorneys are backing Merck and Bristol-Myers in their suits—was “heavily” involved in litigation against the Affordable Care Act.

In an emailed statement to Bloomberg Law, a Merck spokesperson said the company had a “longstanding relationship” with Jones Day, including success before the Supreme Court.

Other drugmakers who have filed lawsuits did not respond or declined a request to comment about their legal teams.

Among the notable attorneys in Jones Day’s arsenal is Yaakov Roth. A former clerk for the late Supreme Court Justice Antonin Scalia, Roth has argued at least three cases before the high court, according to the law firm’s website. His victories include West Virginia v. EPA, a blow to agency authority in which the justices restricted the Environmental Protection Agency’s ability to cut down on power-plant emissions.

Roth would not comment on his involvement in the case but said in an email that “the IRA is the type of issue that will ultimately require resolution by the Supreme Court.”

Attorneys who have “credibility with the justices” are a plus in these kinds of cases, according to Lucas A. Powe Jr., a law professor of the University of Texas at Austin.

“One of the things that’s occurred over the past 30 years is a real professionalization of the Supreme Court bar,” Powe said. “You’re seeing many more repeat players.”

An attorney arguing their first case before the high court, however, is unlikely to be representing the industry in high-stakes cases like those trying to block the drug price negotiation program. “Not a chance,” Powe said.

For example, former Trump administration Solicitor General Noel Francisco is on the Jones Day team representing Bristol Myers. He defended President Donald Trump’s travel bans before the high court and represented R.J. Reynolds Tobacco Co. in 2020 and earlier this year in challenges to restrictions on flavored tobacco products in the US. He also filed a cert petition with the Supreme Court in one of those cases.

“Someone like Noel,” Lowe said, “is among the best of the best” and a “logical choice” for drugmakers to choose as representation.

Other attorneys representing the drug companies who have argued before the Supreme Court include King & Spalding’s Jeffrey Bucholtz; Arnold & Porter Kaye Scholer LLP’s Jeffrey Handwerker, John Elwood, Allon Kedem and William Perdue; and Covington & Burling’s Mark Mosier.

Relevant Experience

The attorneys representing industry also have experience at all levels of government and with federal drug programs.

For example, Johnson & Johnson—which is based in New Jersey—has on its legal team Jeff Chiesa, a former state attorney general and US senator. Former Manhattan Assistant District Attorney David Luttinger, now with Covington & Burling, is also on the case.

Companies “want someone who knows the government and players on their side very well,” when they select law firms, Lowe said. “Often, what you’ll see a firm do is put multiple members on a team who have a high level of government experience and are also subject matter experts.”

Jones Day’s Megan Lacy Owen checks many of the public and private sector boxes. Previously a clerk for Justice Brett Kavanaugh, Owen is representing Merck. In government, her prior experience includes advising the Trump administration’s Office of the White House Counsel. On the industry side, she represented Sanofi when the company intervened in an American Hospital Association case against the Department of Health and Human Services in 2020 over the 340B drug discount program.

Arnold & Porter Kaye Scholer has been the powerhouse firm for PhRMA in numerous cases, including in an Administrative Procedure Act challenge against a CMS regulation regarding co-pay assistance. In Pharmaceutical Research and Manufacturers of America v. Becerra (2021), the US District Court for the District of Columbia ruled in favor of PhRMA that HHS lacked the authority under the Medicaid rebate statute to adopt what is known as the accumulator adjustment rule and that it violated the APA.

Other attorneys in the lawsuits against the drug pricing program also played a key role in another APA challenge before the US District Court for the District of Maryland. In Global Colon Cancer Association in Association of Community Cancer Centers v. Azar (2020), US District Judge Catherine C. Blake blocked the Trump administration’s “Most-Favored Nation Rule.” The rule sought to control Medicare spending by aligning payment for Medicare Part B drugs with international pricing and removing incentives to use more expensive drugs.

Lawrence Gostin, a professor at Georgetown Law, said the legal army being assembled by pharmaceutical companies is “part of a well organized and lavishly funded attempt to use the courts to strike down a signature Biden initiative.”

“The stakes are huge because price negotiations would drive down drug costs for the public and Medicare, but it would impact the bottom line for pharmaceutical companies,” Gostin said.

—With assistance from Jeannie Baumann

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