Pharmaceutical Group Sues Trump Administration to Block Medicare Drug-Pricing Rule

By Elias Schisgall

A pharmaceutical industry group is suing the Trump administration in an attempt to block a regulation that would revamp Medicare drug pricing.

The Pharmaceutical Research and Manufacturers of America, or PhRMA, on Wednesday asked a judge to block a new rule from the Centers for Medicare & Medicaid Services, arguing that the agency exceeded its authority, and that pharmaceutical companies rely on market pricing to support investment and innovation.

The Global Benchmark for Efficient Drug Pricing, or Globe, Model would trigger rebates for drugs covered by Medicare if their prices exceed those paid by other developed countries. It is modeled on a principle known as "most favored nation" pricing.

"MFN pricing would lead to the loss of hundreds of new treatments over the next decade, preventing both new drug approvals and approvals for new indications of existing drugs," the trade association wrote in its lawsuit, filed in the U.S. District Court for the District of Columbia.

The lawsuit names CMS, the Center for Medicare and Medicaid Innovation, and the Health and Human Services Department as defendants, as well as their respective leaders, Mehmet Oz, Abe Sutton, and Robert F. Kennedy, Jr.

CMS and HHS did not immediately respond to requests for comment. The Center for Medicare and Medicaid Innovation is a part of CMS.

The Globe push, expected to start on Jan. 1, is less ambitious than the administration's initial proposal and had faced pushback from drugmakers, The Wall Street Journal reported last month. Drugmakers who previously signed MFN deals are expected to be exempt, the Journal reported. The administration has touted 26 such agreements with drugmakers.

Globe is expected to apply to just four manufacturers, the Journal reported.

Write to Elias Schisgall at elias.schisgall@wsj.com

(END) Dow Jones Newswires

October 07, 2026 15:37 ET (19:37 GMT)