PhRMA legal challenge to Medicare drug pricing

The Pharmaceutical Research and Manufacturers of America (PhRMA) has initiated legal action against the U.S. government to invalidate the ‘Global Benchmark for Efficient Drug Pricing’ (GLOBE) model. The lawsuit targets the Department of Health and Human Services, the Centers for Medicare & Medicaid Services (CMS), and Health Secretary Robert F. Kennedy Jr.

PhRMA contends that the GLOBE rule, which seeks to implement a ‘most-favored-nation’ pricing system by benchmarking Medicare Part B drug prices against prices in comparable OECD countries, exceeds CMS’s statutory authority. The industry group argues that the policy functions as a de facto national drug price control mechanism that requires congressional action rather than administrative implementation.

Beyond the legal argument regarding the separation of powers, PhRMA claims the program will have a minimal impact on patients, estimating it would affect only 0.3% of Medicare Part B enrollees. The association also raised concerns that using international metrics, which may include Quality-Adjusted Life Year (QALY) assessments, could result in discriminatory outcomes for patients with rare diseases, chronic illnesses, or disabilities, while potentially undermining investment in medical research and development.