The Pharmaceutical Research and Manufacturers of America filed a lawsuit against the Trump administration on Wednesday, challenging a new Medicare pilot program that links drug prices to those in other countries. The trade group asserts that the "most-favored nation" initiative exceeds the statutory authority granted to Medicare.
The complaint was lodged in the U.S. District Court for the District of Columbia. The program, designated as GLOBE, operates within Medicare Part B and aims to tie prescription costs to pricing standards found in peer nations. PhRMA argues that the administration lacks the legal power to implement such a mechanism under current Medicare laws.
Despite the legal challenge, the GLOBE pilot is not anticipated to have a significant immediate impact. This limited reach is due to an administrative decision to exempt all but a small number of companies from the mandate. In exchange for these exemptions, those companies agreed to voluntary deals requiring them to charge Medicaid most-favored nation prices.