BIO filed an amicus brief in the U.S. District Court for the District of Columbia, supporting plaintiff Teva Pharmaceuticals' position that the definition of Qualifying Single Source Drug (QSSD) in CMS's IRA-implementing Guidance violates the statutory definition, resulting in significant harm to biopharma innovation. By way of the Inflation Reduction Act (IRA), Congress directed the Centers for Medicare & Medicaid Services (CMS) to "negotiate" with manufacturers the maximum prices of drugs that CMS had previously identified as top-spend medications already marketed for a certain number of years. However, genuine negotiation does not take place under CMS's Drug Price Negotiation Program (DPNP). CMS sets the selected medication's maximum price and by a certain deadline, the manufacturer must either agree or face paying a penalty "excise tax" until there is agreement on the price. The brief argues that CMS has gone beyond its authority via its Guidance, veering from the plain text of the IRA and redefining the definition of a "Qualifying Single Source Drug" or QSSD. Their redefinition of QSSD allows for drug products that would have been ineligible for negotiations to be swept into the DPNP. Rather than promoting innovation, the CMS guidance deters it, disincentivizing the development of new drug products, particularly orphan drugs with new indications.
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