AbbVie Inclusion In Medicare Drug Talks Fails To Justify Lawsuit, Court Rules

AbbVie Inc. (NYSE:ABBV), the manufacturer of Imbruvica, is at the center of a constitutional challenge to the federal government's new Drug Price Negotiation Program.

Imbruvica was among the first 10 drugs selected for price negotiations under the Inflation Reduction Act of 2022. The law gave the Secretary of Health and Human Services (HHS) authority to negotiate prices for medications sold to Medicare and Medicaid.

In response, four chambers of commerce—the Dayton Chamber, the Ohio Chamber, the Michigan Chamber, and the U.S. Chamber—filed suit against the government, including HHS, the Centers for Medicare & Medicaid Services (CMS), and their agency heads. They argued that the program unlawfully displaces market forces with government price-setting and that Congress exceeded its legislative powers.

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Each plaintiff claimed to represent a member company affected by the program. In AbbVie’s case, it holds the FDA new-drug application for Imbruvica and is participating in the negotiation program.

However, the district court dismissed the case for improper venue, ruling that none of the regional chambers met the requirements for associational standing. While the court assumed—without deciding—that the plaintiffs satisfied the first condition (that their members would have standing to sue individually), it found the Dayton Chamber lacked standing, rendering venue in the Western Division of the Southern District of Ohio inappropriate.

The court also declined to transfer the case to the Eastern Division, finding that the Ohio Chamber likewise failed to meet the standard for associational standing.

In a renewed motion to dismiss, the government argued that the lawsuit was not germane to the Dayton Chamber's purpose and would require participation from the affected drug manufacturers. It also noted that many of those manufacturers had already filed separate lawsuits, making the case "unworkable."

Last year, a federal judge dismissed a similar suit brought by the chambers. According to The Hill, the court found that AbbVie and its subsidiary Pharmacyclics had no direct connection to the Dayton, Ohio, business community—undermining the chamber's ability to sue on their behalf.

Price Action: ABBV stock is trading at $198.87 at the last check on Friday.

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