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1 1 (January 31, 2024)

handle is hein.crs/goveofi0001 and id is 1 raw text is: Congressional ~ Research Service Administrative Procedure Act Challenges to CMS's Implementation of the Medicare Drug Price Negotiation Program January 31, 2024 Congress created the Medicare Drug Price Negotiation Program (the program) in 2022 through a budget reconciliation measure known as the Inflation Reduction Act (IRA). The IRA authorizes the Secretary of the Department of Health and Human Services (HHS) to negotiate the prices of certain single-source drugs and biological products under Medicare Part B (physician administered drugs) and Medicare Part D (retail prescription drugs). The IRA directed the HHS Centers for Medicare and Medicaid Services (CMS) to implement the first three years of the program (known as price years 2026-2028) through program instruction or other forms of program guidance. For the initial price years 2026 and 2027, only Medicare Part D drugs are eligible for selection; Part B drugs become eligible for selection in price year 2028. The IRA requires HHS to publish a list of selected drugs, enter into agreements with manufacturers of the drugs selected for negotiation, negotiate a maximum fair price (MFP) for those drugs with manufacturers, and monitor manufacturer compliance with program requirements. CMS began implementing the program by issuing Initial Guidance in March 2023, which was subsequently updated in Revised Guidance in June 2023. In accordance with the statute, CMS selected the first 10 drugs for price negotiation on August 29, 2023, including AstraZeneca's drug Farxiga and Novo Nordisk's Fiasp and NovoLog products. Beginning in June 2023, several pharmaceutical manufacturers, including AstraZeneca and Novo Nordisk, as well as pharmaceutical trade associations, sued CMS in various federal district courts across the country. At least nine lawsuits have challenged the constitutionality of the program on various grounds, including under the First, Fifth, and Eighth Amendments. In addition to these and other constitutional arguments, AstraZeneca and Novo Nordisk also claim that CMS's implementation of the program violates the Administrative Procedure Act (APA). This Sidebar explains the APA arguments made in AstraZeneca and Novo Nordisk's cases. (For more information on the constitutional claims, see CRS Report R47682, Constitutional Challenges to the Medicare Drug Price Negotiation Program.) In both cases, the pharmaceutical companies and the government have filed cross motions for summary judgment. In AstraZeneca's case, the Delaware district court heard oral argument on the parties' cross motions for summary judgment on January 31, 2024, but Congressional Research Service https://crsreports.congress.gov LSB11112 CRS Legal Sidebar Prepared for Members and Committees of Congress

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