The pharmaceutical industry's main trade group, PhRMA, sued the Trump administration on Wednesday over a Medicare Part B pilot program called GLOBE. The complaint, filed in the U.S. District Court for the District of Columbia, argues that the program's "most-favored nation" pricing model exceeds Medicare's statutory authority. The pilot is intended to tie Medicare drug prices to those charged in peer countries.
The administration has exempted all but a handful of companies from GLOBE, according to STAT, in exchange for voluntary agreements to charge Medicaid most-favored-nation prices. As a result, the pilot is not expected to have much immediate impact on the market.
Separately, the Justice Department issued a new directive on combating white-collar fraud that explicitly names drugmakers as a target. The directive says the agency will pursue violations of a federal law that tightly regulates the pharmaceutical industry. The two stories are distinct, but together they show the industry facing pressure on two fronts: one over pricing through administrative action, and another over fraud through criminal enforcement.