Judge withdraws from Medicare drug price case after stock ownership is revealed

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Ohio Governor Mike DeWine, right, shakes hands with Judge Thomas Rose of the U.S. District Court Southern District of Ohio after taking his oath of office, Monday, Jan. 14, 2019, in Cedarville, Ohio.

John Minchillo | AP

A federal judge on Friday withdrew from a case that could block Medicare from negotiating over drug prices, just hours after a watchdog group revealed his ownership of stock in two pharmaceutical companies that would be directly impacted by the new program.

Judge Thomas M. Rose of the U.S. District Court for the Southern District of Ohio withdrew from the case on the same day that the Revolving Door Project, a nonprofit, sent him a letter raising questions about his ownership of stock in Johnson & Johnson and AstraZeneca.

“Given the ethics concerns that your apparent conflict of financial interests in the pharmaceutical industry raise, we call on you to recuse yourself,” wrote the group.

J&J’s blood thinner Xarelto and AstraZeneca’s Type 2 diabetes drug Farxiga are among the 10 drugs that will be subject to price negotiations this year, according to a list unveiled Tuesday by the Biden administration.

Rose, who was appointed by Republican president George W. Bush, owns between $15,000 and $50,000 worth of J&J stock, and shares in AstraZeneca worth up to $15,000, according to his 2022 financial disclosure form. He also owns Moderna stock worth between $15,000 and $50,000, the filing shows.

Until he withdrew on Friday, Rose was the presiding judge in a lawsuit brought in June by the U.S. Chamber of Commerce against the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid services (CMS). The lawsuit asked the court for a ruling that Medicare’s ability to negotiate drug price would be unconstitutional. The pharmaceutical industry filed a flood of lawsuits in the summer to strip Medicare’s new powers. Legal experts believe that drugmakers are spreading their lawsuits across the nation to increase the chances that it will end up in the Supreme Court. “So that’s really the strategy. “

The Chamber had asked Rose to block the program by Oct. 1, the deadline set for drugmakers to sign agreements to participate in the negotiations.