Ardelyx tumbles as lawsuit against CMS dismissed over Xphozah

Ardelyx (NASDAQ:ARDX) plunged 17% after a court dismissed a lawsuit the company filed against the Centers for Medicare and Medicaid Services (CMS)  over its proposal to bundle its kidney disease therapy Xphozah in the Medicare payment system applicable for dialysis services.

"Defendants’ motion to dismiss is therefore granted, and plaintiffs’ motion for a preliminary injunction or expedited summary judgment is denied as moot," US District Judge Beryl Howell wrote in an opinion.

In October, the FDA approved Xphozah as a late-line add-on therapy to cut serum phosphorus in adults with chronic kidney disease on dialysis. 

The issue relates to Medicare’s plan to include Xphozah, along with all other oral-only phosphate-lowering therapies (PLTs), in its End-Stage Renal Disease Prospective Payment System (ESRD PPS), a bundled payment system for dialysis services.

The decision, which will take effect on January 1, 2025, can potentially eliminate Part D coverage for Xphozah.

The plaintiffs alleged that the Medicare proposal violates U.S. law, noting that dialysis providers do not administer Xphozah and other PLTs, currently offered under outpatient pharmacy benefit plans such as Medicare Part D.