Biden HHS to Appeal Judge’s Order to Scrap Trump-Era Drug Rule

The Health and Human Services department plans to appeal a federal judge’s order to withdraw a Trump-era rule on copay assistance programs that was opposed by drug industry-backed patient groups.

The notice of appeal to the US Court of Appeals for the District of Columbia Circuit was filed Tuesday in the US District Court for the District of Columbia on behalf of the HHS, HHS Secretary Xavier Becerra, the Centers for Medicare & Medicaid Services, and CMS Administrator Chiquita Brooks-LaSure.

In September, US District Judge John D. Bates wrote in an order that the CMS rule (RIN 0938-AT98) appears to conflict with the definition of “cost-sharing” in the Affordable Care Act and federal regulations. The 2020 rule said pharmacy benefit managers—the entities that manage prescription drug benefits on behalf of insurers—don’t have to count drugmaker copay assistance toward patients’ out-of-pocket costs.

That ruling was a victory for the HIV+Hepatitis Policy Institute, the Diabetes Leadership Council, and the Diabetes Patient Advocacy Coalition, which filed a lawsuit against the Medicare rule in August 2022. The groups alleged the rule allowed health plans and PBMs to collect funds from both patients and drugmakers while not using any of that money to alleviate the financial burden on patients.

Pfizer Inc. and Johnson & Johnson are among the institute’s corporate sponsors. Pharmaceutical companies like Abbott Laboratories, Eli Lilly & Co., and Merck & Co. also give funding to the Diabetes Leadership Council and its affiliated Diabetes Patient Advocacy Coalition.

The HHS had argued in response to the patient groups’ lawsuit last year that the CMS found manufacturer coupons “can add significant long-term costs to the health care system that may outweigh the short-term benefits of allowing the coupons, and counter-balance issuers’ efforts to point enrollees to more cost-effective drugs.”

The case is HIV & Hepatitis Policy Inst. v. Dep’t of Health & Human Servs., D.D.C., No. 1:22-cv-02604, appeal filed 11/28/23.