PhRMA Files Motion for Restraining Order and Preliminary Injunction in MFN Suit
On December 10, 2020, the Pharmaceutical Research and Manufacturers of America (PhRMA), the Association of Community Cancer Centers (ACCC), the Global Colon Cancer Association (GCCA) and National Infusion Center Association (NICA) filed a motion for a temporary restraining order and preliminary injunction in its lawsuit challenging the legality of the administration’s Most Favored Nation (MFN) Rule, which was filed on December 4 in the U.S. District Court for the District of Maryland (and was previously covered here).
The motion and accompanying memorandum of law assert that the MFN rule, which is set to go into effect on January 1, 2021, will cause immediate and irreparable harm and, as such, the court should halt implementation of the rule while the lawsuit proceeds. PhRMA and its co-plaintiffs allege that they are likely to succeed on the merits and that they will suffer irreparable harm absent relief.
Specifically, the motion alleges that “the MFN Rule is unlawful on several procedural and substantive grounds, both statutory and constitutional. It will immediately and irreparably harm Medicare patients, healthcare providers, and pharmaceutical manufacturers. And the balance of equities and the public interest weigh heavily against implementation of the Rule. Plaintiffs accordingly seek a temporary restraining order and preliminary injunction…to enjoin implementation of the MFN Rule.”
In support of their position that they are likely to succeed on the merits, plaintiffs argue that the MFN Rule was unlawfully promulgated without notice and comment; that the MFN Rule exceeds CMS’s statutory authority; that Section 1115A is unconstitutional as interpreted in the MFN Rule, and that the court has jurisdiction over the case. We discussed these in a bit more detail in our prior post.
Irreparable Harm Arguments
To support their position that they will suffer irreparable harm if the court does not order relief (a requirement for a preliminary injunction to be granted), the plaintiffs argue that: patients will suffer irreparable harm to their health; healthcare providers will suffer irreparable harm to their practices; pharmaceutical manufacturers will suffer unrecoverable economic harms and lost research and development opportunities; plaintiffs will suffer irreparable harm to their notice-and-comment rights; and plaintiffs will suffer an irreparable constitutional injury.
The plaintiffs argue that patients will suffer irreparable harm if the MFN rule is allowed to go into effect because their access to needed medications will be obstructed. The motion states that “[t]his harm is not mere speculation. CMS acknowledges that the MFN Rule will impede patients’ ability to access their medications. CMS admits that the MFN Rule will cause some providers to ‘choose not to provide MFN Model drugs or prescribe alternative therapies instead.’”
They also argue that healthcare providers will suffer irreparable harm to their practices because the MFN Rule cuts the reimbursement amounts Medicare pays to healthcare providers and in 2021 alone, “CMS projects that the MFN Rule will reduce Medicare Part B drug expenditures – and thus revenues for providers – by almost $5 billion.” The brief cites CMS’s acknowledgement that, starting January 1, providers “will need to decide if the difference between the amount that Medicare will pay and the price that they must pay to purchase the drugs would allow them to continue offering the drugs,” and therefore concludes that where providers cannot buy drugs at or below the MFN rates, “providers will have no choice but to (1) incur losses on every dose or (2) ‘prescribe alternative therapies instead.’”
Pharmaceutical manufacturers will also suffer unrecoverable economic harms according to the plaintiffs, as outlined in declarations filed with the Court. In those declarations, “PhRMA members project massive revenue losses as a result of the MFN Rule – for some companies, hundreds of millions of dollars in 2021 alone and a substantial share of total revenue.” The plaintiffs then go on to note that “[m]assive revenue reductions will in turn necessitate reducing investment in research and development.”
The argument that they will suffer irreparable harm to their notice-and-comment rights is based on a “well settled” understanding that “an agency’s violation of a procedural protection, like the right to notice and comment, causes a cognizable injury where ‘the government act performed without the procedure in question will cause a distinct risk to a particularized interest of the plaintiff.’” Plaintiffs argue that the affected parties are therefore injured by the “[d]eprivation of a procedural right – in this case, the right … to submit comments on the [MFN Rule] prior to its adoption.”
And lastly, the argument that the plaintiffs will suffer an irreparable constitutional injury is based on the fact that “the denial of a constitutional right … constitutes irreparable harm for purposes of equitable jurisdiction” and that because plaintiffs allege that the MFN Rule is unconstitutional on several levels, the unconstitutionality “establishes irreparable harm on its own” and also “reinforces the unrecoverable injuries the Rule will inflict on patients, providers, and manufacturers.”