Court Backs Single-Drug Manufacturer on Medicare Discounts

Medicare acted arbitrarily when it determined a pharmaceutical company didn’t qualify for a gradual phase-in of required manufacturer discounts under the new Medicare Part D Discount Program, a federal court found.

The US District Court for the District of Columbia on Monday blocked the Centers for Medicare & Medicaid Services from denying PharmaEssentia USA Corp’s application for “specified small manufacturer” status. This designation allows the company to phase in discounts obligated under the Inflation Reduction Act over several years rather than all at once.

Manufacturers applying for the designation are required to prove that 80% of the costs for drug ...