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`Naomi A. Igra (SBN 269095)
`naomi.igra@sidley.com
`SIDLEY AUSTIN LLP
`555 California Street
`Suite 2000
`San Francisco, CA 94104
`Telephone: +1 415 772 7495
`Facsimile: +1 415 772 7400
`
`Joseph R. Guerra (pro hac vice to be submitted)
`jguerra@sidley.com
`Erika L. Maley (pro hac vice to be submitted)
`emaley@sidley.com
`Sean C. Griffin (pro hac vice to be submitted)
`sgriffin@sidley.com
`SIDLEY AUSTIN LLP
`1501 K Street, N.W.
`Washington, D.C. 20005
`Telephone: +1 202 736 8228
`Facsimile: +1 202 736 8711
`
`Attorneys for Plaintiffs Biotechnology Innovation
`Organization and Biocom California
`
`Beth S. Brinkmann (SBN 129937)
`bbrinkmann@cov.com
`Mark Mosier (pro hac vice to be submitted)
`mmosier@cov.com
`Conrad Scott (pro hac vice to be submitted)
`cscott@cov.com
`COVINGTON & BURLING LLP
`1 CityCenter
`850 10th Street N.W.
`Washington, D.C. 20001
`Telephone: +1 202 662 5312
`Facsimile: +1 202 662 6291
`
`Attorneys for Plaintiff California Life Sciences
`Association
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`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`BIOTECHNOLOGY INNOVATION
`ORGANIZATION; CALIFORNIA LIFE
`SCIENCES ASSOCIATION; and BIOCOM
`CALIFORNIA,
`
`
`Plaintiffs,
`
`Civil Case No: 20-cv-08603
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`COMPLAINT FOR DECLARATORY
`AND INJUNCTIVE RELIEF
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`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF – CASE NO. 20-CV-08603
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`ADMINISTRATIVE PROCEDURE
`ACT CASE
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`v.
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`ALEX M. AZAR, II, in his official capacity as
`SECRETARY OF THE UNITED STATES
`DEPARTMENT OF HEALTH AND HUMAN
`SERVICES; UNITED STATES
`DEPARTMENT OF HEALTH AND HUMAN
`SERVICES; SEEMA VERMA, in her official
`capacity as ADMINISTRATOR OF THE
`CENTERS FOR MEDICARE AND MEDICAID
`SERVICES; and THE CENTERS FOR
`MEDICARE AND MEDICAID SERVICES,
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`Defendants.
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`Plaintiff Biotechnology Innovation Organization (“BIO”), on behalf of itself and its
`members, plaintiff California Life Sciences Association (“CLSA”), on behalf of itself and its
`members, and plaintiff Biocom California (“Biocom”), on behalf of itself and its members (together,
`“Plaintiffs”), bring suit against Alex M. Azar, in his official capacity as the Secretary of the United
`States Department of Health and Human Services (“HHS”); HHS; Seema Verma, in her official
`capacity as the Administrator of the Centers for Medicare and Medicaid Services (“CMS”); and
`CMS (together, “Defendants”), and allege as follows:
`INTRODUCTION
`1.
`This lawsuit challenges HHS’s issuance, during the final days of the Trump
`Administration, of a sweeping new rule that alters the statutorily prescribed method for determining
`reimbursement payments that healthcare providers receive for administering “the top 50”
`prescription medications to Medicare patients in hospital outpatient departments and other facilities.1
`This eleventh-hour rule was issued in clear violation of the notice-and-comment requirements of the
`Administrative Procedure Act (“APA”), and is substantively unlawful and ultra vires. The rule is an
`impermissible attempt by HHS to use its limited authority to “test” new payment “models” as a basis
`for completely rewriting the reimbursement formula Congress enacted.
`2.
`Over two years ago, in October 2018, HHS announced that it might revise the
`reimbursement formula based on an “international pricing index.” That idea was not set forth in a
`proposed rule, but rather in an advanced notice of proposed rulemaking. In November 2020, HHS
`issued a new and different reimbursement concept as an immediately effective interim final rule that
`will begin altering reimbursement payments as of January 1, 2021—before the agency even receives,
`much less considers, the comments it has solicited on this rule. That action clearly violates the APA.
`3.
`HHS has rushed to put its new “Most Favored Nation” Rule (“MFN Rule”) into effect
`despite its recognition that there is no “reliable precedent in the U.S. market” for its new
`reimbursement formula, and that there is “an unusually high degree of uncertainty” about the
`
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`1 See Final Rule, Most Favored Nation (MFN) Model, 85 Fed. Reg. 76,180 (Nov. 27, 2020) (to be
`codified at 42 C.F.R. pt. 513) (“MFN Rule”); Fact Sheet: Most Favored Nation Model for Medicare
`Part B Drugs and Biologicals Interim Final Rule with Comment Period, CMS (Nov. 20, 2020),
`https://tinyurl.com/y65f3qr6.
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`formula’s potential impacts. 85 Fed. Reg. at 76,237. Indeed, HHS acknowledges that, as a result of
`the MFN Rule, some healthcare providers may suffer extreme financial hardship, id. at 76,222, and
`some Medicare patients may receive inferior therapies with “lower efficacy or greater risks,” or end
`up “postponing or forgoing treatment” altogether. Id. at 76,244. The agency’s own estimates show
`that, within three years, nearly one in five Medicare Part B patients may have no access to drugs
`covered by the MFN Rule, id. at 76,237–38, and that half of the projected savings to Medicare
`“would be due to lost utilization” of these drugs, id. at 76,239. In addition, the MFN Rule will
`deprive emerging biotechnology companies of their ability to attract crucial financing by seriously
`impacting their potential for market-based returns. Such decreases in investment will place critical
`research at risk, threatening the ability to develop innovative new drugs, especially for rare diseases.
`4.
`HHS’s purported justification for giving this unprecedented and harmful rule
`immediate effect is that economic disruptions caused by the COVID-19 pandemic have “given rise
`to an urgent need for swift action to reduce drug prices,” and that implementation of its new
`reimbursement model will provide “immediate relief to Medicare beneficiaries.” Id. at 76,249. This
`contention is baseless, and cannot justify dispensing with notice and comment on a new policy that
`the President has described as “transformative.”2 Indeed, the Administration has been pursuing
`similar measures for years and never previously asserted that they are a necessary response to the
`pandemic. The MFN Rule itself excludes from the new pricing structure all drugs authorized “to
`treat patients with suspected or confirmed COVID-19,” 42 C.F.R. § 513.130(b)(ix), on the ground
`that applying the MFN Rule to COVID-19 drugs would impair the “rapid, widespread availability of
`such drugs in the U.S. to treat patients with suspected or confirmed COVID-19.” 85 Fed. Reg. at
`76,191. And this Court recently rejected a similar claim that the economic effects of pandemic
`allowed the outgoing Administration to make sweeping policy changes immediately effective
`without notice-and-comment. Chamber of Commerce v. U.S. Dep’t of Homeland Sec., No. 4:20-cv-
`7331, 2020 WL 7043877 (N.D. Cal. Dec. 1, 2020).
`5.
`Further, the whole premise of the new Rule is that HHS is testing a new
`
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`2 Remarks by President Trump at Signing of Executive Orders on Lowering Drug Prices, The White
`House, (July 24, 2020 from 3:45 PM ET to 4:28 PM ET), https://tinyurl.com/yxhpxvbs.
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`reimbursement model that it believes will reduce drug prices. HHS cannot claim that it is testing a
`model to see if it reduces drug prices, then declare that the Rule should go into effect immediately
`because HHS knows that its model will immediately reduce drug prices. HHS certainly cannot make
`such a declaration in light of its admission that its unprecedented model involves “an unusually high
`degree of uncertainty,” 85 Fed. Reg. at 76,237, and could end up harming—rather than helping—
`patients, by forcing them to accept riskier or less effective treatments or to forgo treatment during
`the COVID-19 pandemic. In fact, while HHS claims that implementing the MFN Rule as an interim
`final rule is necessary to ensure that the pandemic does not cause seniors to “stint[] on care,” id. at
`76,249, it admits that some of the savings it projects are “attributable to beneficiaries not accessing
`their drugs through the Medicare benefit,” id. at 76,237 (emphasis added).
`6.
`Although HHS’s premature conclusions about the outcome of its purported test do not
`justify its failure to comply with the APA’s notice-and-comment requirements, they confirm the
`other overarching flaw in its action—namely, that the MFN Rule is not a valid exercise of HHS’s
`authority to test models. HHS has invoked a provision that allows it to “test” certain payment and
`patient care “models” on a “defined population,” for which “there are deficits in care leading to poor
`clinical outcomes or potentially avoidable expenditures.” See 42 U.S.C. § 1315a. HHS can expand a
`test if certain criteria are met, and must report the results of those tests so Congress can consider
`adopting models into law. Id. The MFN Rule plainly falls outside the ambit of this limited authority,
`and is instead an impermissible attempt to rewrite the “minutely detailed” reimbursement formula
`Congress enacted for Medicare Part B drugs. Hays v. Sebelius, 589 F.3d 1279, 1282 (D.C. Cir. 2009)
`(citation omitted).
`7.
`The reimbursement formula Congress enacted for Medicare Part B drugs is based
`upon the competitive U.S. market for pharmaceutical products in order to ensure that healthcare
`providers do not lose money on the drugs that they administer to patients. In general, Medicare Part
`B covers medical services in the outpatient setting (e.g., visits to a physician’s office or a hospital
`outpatient facility). Pursuant to that coverage, Part B reimburses providers when they administer
`drugs to patients during those visits. These provider-administered drugs include many injectable and
`infusion products that treat serious or life-threatening diseases, like cancer, autoimmune conditions,
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`or end-stage renal disease (“ERSD”). In most cases, the providers must pay out of pocket to
`purchase and stock the drugs they administer and may seek reimbursement from Medicare only once
`the drug has been administered to a Medicare patient
`8.
`Under the existing statute, the government reimburses providers for Part B drugs
`under a formula that relies on the “average sales price” (“ASP”) of the drugs in the United States,
`plus a small mark-up. 42 U.S.C. § 1395w-3a(b). The MFN Rule disregards that congressional
`design. It uses the lowest price charged outside of the United States, in one of 22 specified foreign
`countries, as the basis for Medicare reimbursements. Far from testing this model on a “defined
`population” and in a manner that can later be expanded in a second phase of testing, HHS has made
`the reimbursement standard immediately mandatory for the entire country for 50 different drugs
`representing approximately 75% of Part B drug spending. 85 Fed. Reg. at 76,193. The Rule was
`obviously not designed to test a hypothesis, but instead to alter drug pricing on a wholesale basis.
`9.
`The Administration’s own actions and statements prior to issuance of the MFN Rule
`confirm this. Legislative proposals to tie Medicare Part B reimbursement rates to foreign drug prices
`have been raised since at least 2018, but Congress did not adopt them. Yet, after having failed to
`secure passage of such legislation, President Trump issued executive orders in the midst of the
`Presidential campaign that purported to “completely restructure the prescription drug market, in
`terms of pricing and everything else,”3 by doing what had “never [been] done” before: creating a
`“Most Favored Nation” rule for drug pricing.4 The President’s September 13, 2020 Order declared
`that it was “the policy of the United States” that Medicare not reimburse providers more for Part B
`prescription drugs or biological products “than the most-favored-nation price,”5 and directed HHS to
`implement this policy through rulemaking.
`10.
`In accordance with these campaign-inspired directives—not the standards of its
`testing authority or any exigencies caused by the COVID-19 pandemic—HHS issued its new MFN
`Rule to “completely restructure the prescription drug market.” In doing so, it has exceeded its
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`3 Remarks by President Trump at Signing of Executive Orders on Lowering Drug Prices, The White
`House (July 24, 2020 from 3:45 PM ET to 4:28 PM ET), https://tinyurl.com/yxhpxvbs.
`4 Id.
`5 Executive order on Lowering Drug Prices by Putting America First, The White House (Sept. 13,
`2020), https://tinyurl.com/yynzmtn4.
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`narrow authority to test limited models.
`11.
` The agency’s action also runs counter to the Medicare Act’s access to therapies
`provision, 42 U.S.C. § 18114, because implementing foreign price controls in the United States will
`severely undermine access to medicine in the United States, as well as eviscerate innovation and the
`development of lifesaving medicines and other biological products.
`12.
`HHS’s interpretation of the testing provision is so broad and lacking in substantive
`limitations that, if accepted, it would render that provision—and its authorization to waive aspects of
`the Social Security Act—unconstitutional under the non-delegation doctrine. It would also violate
`the Presentment Clause and the constitutional principle of separation of powers.
`PARTIES
`13.
`Plaintiff Biotechnology Innovation Organization (“BIO”) is a nonprofit corporation
`organized under the law of Washington, D.C., with its principal place of business in Washington,
`D.C. BIO is the world’s largest biotechnology trade association, representing more than 1,000
`biotechnology companies, academic institutions, state biotechnology centers and related
`organizations across the United States and in more than 30 other nations. Hundreds of BIO’s
`members are located in California. BIO members are involved in the research and development of
`innovative healthcare and biotechnology products, including the first biologic products, the first
`targeted therapies for oncology, and recombinant DNA products.6 As described below, the MFN
`Rule will be devastating to such biotechnology innovation.
`14.
`Plaintiff California Life Sciences Association (“CLSA”) is a nonprofit organization
`organized under California law, with its principal place of business in South San Francisco,
`California. CLSA is the state’s largest life sciences advocacy and business leadership organization,
`and it works closely with industry, government, academia, patient groups, and others to shape public
`policy, improve access to innovative technologies and grow California’s life sciences
`economy. CLSA serves biotechnology, pharmaceutical, medical device and diagnostics companies,
`research universities and institutes, investors and service providers throughout the Golden State.7
`
`
`6 A list of BIO members is available at BIO Member Directory, https://tinyurl.com/y4r3y5tj.
`7 A list of CLSA members is available at CLSA Member Directory, https://tinyurl.com/yxvxvewc.
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`Over one thousand of CLSA’s member companies are located in California.
`15.
`Plaintiff Biocom California (“Biocom”) is a nonprofit corporation organized under
`California law, with its principal place of business in San Diego, California. Biocom is an
`international life sciences advocacy and business organization representing more than 1,300
`members—the vast majority of which are located in California—to drive public policy, build a
`network of industry leaders, create access to capital, introduce cutting-edge workforce development
`and STEM education programs, and create robust value-driven purchasing programs. Biocom serves
`life sciences, pharmaceutical, medical device, genomics, and bioinformatics companies.
`16.
`The MFN Rule is of vital concern to BIO, CLSA, Biocom and their members and
`partners. Several of BIO’s, CLSA’s, and Biocom’s members manufacture drugs and biological
`products subject to the MFN Rule, and they will be directly harmed by the MFN Rule. BIO, CLSA,
`and Biocom also have members who are academic centers, investors, and research institutes, who
`will be harmed by the MFN Rule because it will decrease investment in pharmaceutical innovation.
`This suit seeks to protect interests that are germane to plaintiffs’ purposes because the MFN Rule
`directly impacts the goals of plaintiffs to advocate for public policies that encourage investment in
`innovative biotechnology products. None of the claims asserted in this complaint nor the relief
`sought require plaintiffs’ members to be parties.
`17.
`California is home to more than 3,700 life sciences companies. This innovation
`ecosystem in California has built companies that produce some of the world’s most important and
`innovative therapies. California’s life sciences sector directly employs 323,723 people throughout
`the state in for-profit companies, universities, and nonprofit research institutes. When indirect and
`induced employment are factored in, the sector accounts for almost 1 million jobs. The Bay Area led
`the state with 87,441 direct life sciences jobs. In 2019, California companies entered more than
`1,380 medicines into clinical trials. Many are intended to treat areas of major unmet medical need,
`such as cancer, neurodegenerative conditions, and infectious diseases. The MFN Rule directly
`threatens this critical innovation ecosystem.
`18.
`Defendant HHS is responsible for administering, among other things, the Medicare
`programs and has authority to test payment models under the Patient Protection and Affordable Care
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`Alex M. Azar is Secretary of HHS (the “Secretary”) and is sued in his official
`
`Act, Pub. L. No. 111-148, § 3021, 124 Stat. 119, 389 (2010) (the “PPACA”) (codified at 42 U.S.C. §
`1315a).
`19.
`capacity.
`20.
`capacity.
`21.
`Defendant CMS is a federal agency within HHS, and the Center for Medicare and
`Medicaid Innovation (“CMMI”) is a component of CMS that is responsible for administering the
`PPACA’s provision for testing models. CMS, together with HHS, promulgated the MFN Rule
`challenged in this lawsuit.
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`Defendant Seema Verma is the Administrator of CMS, and is sued in her official
`
`JURISDICTION AND VENUE
`22.
`Subject matter jurisdiction is founded on 28 U.S.C. § 1331 because this case arises
`under the Constitution and laws of the United States.
`23.
`An actual controversy exists between the parties within the meaning of 28 U.S.C.
`§ 2201, and this Court has the authority to grant declaratory and injunctive relief pursuant to 28
`U.S.C. §§ 2201 and 2202.
`24.
`Venue lies in this district under 28 U.S.C. § 1391(e)(1) because this is a judicial
`district in which plaintiff CLSA resides, and this action seeks relief against federal agencies and their
`officials acting in their official capacities.
`25.
`The MFN Rule is an interim final rule, which constitutes final agency action. See
`Career College Ass’n v. Riley, 74 F.3d 1265 (D.C. Cir. 1996).
`FACTUAL BACKGROUND
`
`The September 13, 2020 Executive Order
`
`26.
`The MFN Rule asserts that it is an emergency response to economic disruptions
`caused by the COVID-19 pandemic, and that it falls within the agency’s statutory authority to test
`payment models. However, the Administration has been seeking to tie U.S. drug prices to foreign
`prices one way or another for years—well before the pandemic began—and resorted to its new MFN
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`Rule only after it failed to secure passage of legislation.
`27.
`President Trump stated in his January 30, 2018 State of the Union Address that he
`was “direct[ing] [his] administration to make fixing the injustice of high drug prices one of our top
`priorities,” that “[p]rices would come down” and that “[i]n many other countries, these drugs cost far
`less than what we pay in the United States.”8
`28.
`On May 11, 2018, President Trump issued a “Blueprint to Lower Drug Prices,”
`stating that the United States bears the “burden of financing drug development” because “[o]ther
`countries use socialized healthcare to command unfairly low prices from U.S. drug makers.”9
`29.
`The President stated in September 2019 that he wanted Congress to address drug
`prices: “the American people need Congress to help,” and “[l]et’s get it done in a bipartisan way!”10
`30.
`Secretary Azar declared the COVID-19 pandemic to be a public health emergency on
`January 31, 2020, with retroactive effect to January 27, 2020. The Secretary’s declaration made no
`mention of a need to change the way Part B drugs were reimbursed.
`31.
`On July 2, 2020, the President expressed his frustration with the failure to pass
`legislation regarding drug pricing, stating, “We MUST lower drug prices for patients!” and that
`“@HouseGOP . . . ha[s] SHOWN LEADERSHIP while . . . @SenateDems WALK AWAY!”11 The
`President did not assert, however, that drug prices must be lowered to fight the COVID pandemic.
`32.
`Despite President Trump’s efforts to seek passage of legislation to tie U.S. drug
`prices to foreign prices, and Congress’ consideration of several bills that would have changed the
`statutory formula for Medicare drug pricing (including one that would have used international
`reference pricing benchmarks), Congress did not pass any such bills into law. On July 24, 2020,
`President Trump attempted to bypass Congress by signing four “sweeping” Executive Orders
`designed to “significantly lower the cost of prescription drugs while increasing access to life-saving
`
`
`8 President Donald J. Trump’s State of the Union Address, The White House (Jan. 30, 2018),
`https://tinyurl.com/ybtdytqa (remarks as prepared for delivery).
`9 President Donald J. Trump’s Blueprint To Lower Drug Prices, The White House (May 11, 2018),
`https://tinyurl.com/y9q5zxjm.
`10 @realDonaldTrump, TWITTER (Sept. 19, 2019, 5:42 PM), https://tinyurl.com/y4u29jtr.
`11 @realDonaldTrump, TWITTER (July 2, 2020, 5:45 PM), https://tinyurl.com/yxgr3oxz.
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`medications . . . .”12 He described these four orders as “a bold and historic, very dramatic action to
`reduce the price of prescription drugs for American patients and American seniors.”13 He further
`stated that they would be the “most far-reaching prescription drug reforms ever issued by a
`President. Nothing even close.”14 These Executive Orders were announced in a press release
`entitled: “Congress Didn’t Act on Prescription Drug Prices. So President Trump Did.”15
`33.
`These orders were designed to “completely restructure the prescription drug market,
`in terms of pricing and everything else.”16 One was designed to “ensure[] the United States pays the
`lowest price available among economically advanced countries for Medicare Part B drugs.”17
`34.
`This Executive Order, called “Lowering Drug Prices by Putting America First,” was
`described by President Trump at the July 24, 2020 press conference. The President stated that,
`pursuant to this Executive Order, the United States “will determine what other medically advanced
`nations pay for the most expensive drugs, and instead of paying the highest price, Medicare will pay
`the lowest price and so will lots of other U.S. buyers.”18 He went on to state that “Medicare is the
`largest purchaser of drugs anywhere in the world by far. Medicare—largest purchaser of drugs in the
`world. And we’re finally going to use that incredible power to achieve a fairer and lower price for
`everyone. Everyone will get a fairer and much lower price. This is not talking about one half of a
`percent. This is big stuff.”19 The President did not state, however, that the Executive Order would
`alleviate economic hardship caused by the COVID-19 pandemic, which had been ongoing for
`
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`12 Congress Didn’t Act on Prescription Drug Prices. So President Trump Did, The White House
`(July 27, 2020), https://tinyurl.com/y5zye4oe; President Donald J. Trump Is Taking Action to Lower
`Drug Costs and Ensure That Americans Have Access to Life-saving Medications, The White House
`(July 24, 2020), https://tinyurl.com/y5lyzcg7.
`13 Remarks by President Trump at Signing of Executive Orders on Lowering Drug Prices, The White
`House (July 24, 2020 from 3:45 PM ET to 4:28 PM ET), https://tinyurl.com/yxhpxvbs.
`14 Id.
`15Congress Didn’t Act on Prescription Drug Prices. So President Trump Did, The White House (July
`27, 2020), https://tinyurl.com/y5zye4oe.
`16 Id.
`17 Id.; President Donald J. Trump Is Taking Action to Lower Drug Costs and Ensure That Americans
`Have Access to Life-saving Medications, The White House (July 24, 2020),
`https://tinyurl.com/y5lyzcg7.
`18 Remarks by President Trump at Signing of Executive Orders on Lowering Drug Prices, The White
`House (July 24, 2020 from 3:45 PM ET to 4:28 PM ET), https://tinyurl.com/yxhpxvbs.
`19 Id.
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`months by then.
`35.
`While President Trump reportedly signed the Executive Order on July 24, 2020, a
`copy of this Order was not released.
`36.
`Instead, President Trump stated this Order would be held “until August 24th, hoping
`that the pharmaceutical companies will come up with something that will substantially reduce drug
`prices. And the clock starts right now. So it’s August 24th at 12:00, after which the order on favored
`nations will go into effect.”20
`37.
`The Order was not released on August 24. Instead, on September 13, 2020, President
`Trump issued a new version of the Lowering Drug Prices by Putting America First Executive Order,
`which revoked the never-released July 24, 2020 Order of the same name.21
`38.
`The September 13, 2020 Executive Order states that “Americans pay more per capita
`for prescription drugs than residents of any other developed country,” and that “[i]t is unacceptable
`that Americans pay more for the exact same drugs.” Id. It further states that “Americans finance
`much of the biopharmaceutical innovation that the world depends on,” thereby “effectively
`subsidizing innovation and lower-cost drugs for the rest of the world,” and that the federal
`government “should insist on, at a minimum, the lowest price at which the manufacturer sells that
`drug to any other developed nation.” Id.
`39.
`As to the “policy” it is intended to effect, the Executive Order states “[i]t is the policy
`of the United States that the Medicare program should not pay more for costly Part B prescription
`drugs or biological products than the most-favored-nation price,” defined as the price available “in a
`member country of the Organisation for Economic Co-operation and Development (OECD) that has
`a comparable per-capita gross domestic product.” Id.
`40.
`That Executive Order directs the HHS Secretary to “immediately take appropriate
`steps to implement his rulemaking plan to test a payment model pursuant to which Medicare would
`
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`20 Id.
`21 Executive Order on Lowering Drug Prices by Putting America First, The White House (Sept. 13,
`2020), https://tinyurl.com/yynzmtn4; see id. § 5 (“The Executive Order of July 24, 2020 (Lowering
`Drug Prices by Putting America First), is revoked.”).
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`pay, for certain high-cost prescription drugs and biological products covered by Medicare Part B, no
`more than the most-favored-nation price.”22
`41.
`The Executive Order does not refer to the COVID-19 pandemic.
`42.
`On September 13, 2020—the day that President Trump released the Executive
`Order—he tweeted that “prices are coming down FAST!”23 The President also repeated his earlier
`sentiments about the breadth and far-reaching impact of this Order, tweeting: “My Most Favored
`Nation order will ensure that our Country gets the same low price Big Pharma gives to other
`countries. The days of global freeriding at America’s expense are over[,]”24 which Secretary Alex
`Azar echoed in his own statements, describing the Order as “historic.”25 However, no regulation or
`proposed rule was issued at that time.
`43.
`The MFN Rule was not issued until more than two months later, on November 20,
`2020. It was not published as a notice of proposed rulemaking for public comment before going into
`effect. Instead, it was published in the Federal Register on November 27, 2020, as an interim final
`rule with immediate effect. 85 Fed. Reg. at 76,180. It has a 60-day comment period, which began on
`the Rule’s effective date and ends on January 26, 2021. Id. Upon the MFN Rule’s release, President
`Trump characterized it as a “groundbreaking rule[] to very dramatically lower the price of
`prescription drugs,” further stating that it is an “unprecedented reform” “to end global freeloading,”
`in which higher American drug prices “effectively subsidiz[e] socialism abroad.”26
`44.
`The President’s remarks further suggested that the impetus for the release of the MFN
`Rule was the results of the November 2020 presidential election, asserting that pharmaceutical
`companies had run “negative advertisements against me during the campaign—which I won, by the
`way,” and had “even decided not to assess the results of their vaccine; in other words, not come out
`
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`22 Id. § 3.
`23 @realDonaldTrump, TWITTER (Sept. 13, 2020, 2:58 PM), https://tinyurl.com/yy4nea22.
`24 Id.
`25 @SecAzar, TWITTER (Sept. 13, 2020, 6:51 PM), https://tinyurl.com/y4sgktsr (“President Trump is
`continuing his historic work to lower drug prices and put American patients first. Today he is
`moving forward with an executive order to stop foreign free riding and ensure American patients get
`the discounts given to other countries.”).
`26 Remarks by President Trump on Delivering Lower Prescription Drug Prices for All Americans,
`The White House, (Nov. 20, 2020), https://tinyurl.com/y6r4g62r.
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`with a vaccine until just after the election.”27 Indeed, press reports indicate that the MFN Rule was
`released in retaliation for the