Biopharma companies and industry lobbying groups are striking out in their legal efforts to challenge price-cutting measures in the Inflation Reduction Act.
On Monday, a New Jersey federal judge tossed (PDF) lawsuits by Bristol Myers Squibb and Johnson & Johnson, which questioned the constitutionality of the U.S. government requiring drugmakers to negotiate with Medicare on the pricing of their products.
The dismissal comes two months after a Delaware federal court rejected a similar lawsuit by AstraZeneca. On Monday, the European drugmaker filed its challenge of the decision with the U.S. Court of Appeals. Similarly, J&J said it will appeal Monday’s decision.
“This is a disappointing ruling for patients and America’s leadership role in medical innovation,” a J&J spokesperson wrote in an email. “The IRA’s price control provisions will constrain development of new medicines, limit patient access and choice and negatively impact overall quality of care.”
In his written opinion on Monday, Judge Zahid Quraishi rejected the claim of BMS and J&J that the new drug pricing program is an unconstitutional taking of their assets.
“Selling to Medicare is a choice plaintiffs can accept or not accept,” Quraishi wrote. “[It] may be less profitable than it was before the institution of the program, but that does not make the defendants’ decision to participate any less voluntary.”
A BMS spokesperson also said that the company will appeal.
“We maintain our concerns that the IRA's so-called 'negotiation' program is in violation of the U.S. Constitution and will have a serious impact on future innovation for patients. BMS will continue to work with CMS on implementation as required by the law.,” the spokesperson said in a statement.
The decision was another defeat for the industry against the Biden administration initiative. In February, a Texas federal judge rejected a lawsuit brought by industry association PhRMA. Last year, an Ohio federal court swatted away an attempt by the U.S. Chamber of Commerce—which cited a due process clause in the Fifth Amendment—to delay Medicare negotiations until litigation could be settled.
This week, PhRMA begins arguments in an appeal of its case, which was originally dismissed because of a jurisdictional technicality.
Among the 10 drugs first identified for Medicare negotiation are BMS’ Pfizer-partnered Eliquis and J&J’s Xarelto and Stelara. Eliquis and Xarelto are blood thinners. Medicare Part D spending for Eliquis reached $16.5 billion from June of 2022 to May of 2023. Spending for Xarelto and Stelara reached a combined $8.7 billion during that time period. Negotiations are underway to set the new prices which will go into effect in 2026.
The cases filed by BMS and J&J were combined in February to avoid duplication. Also joining in the litigation—because of the overlapping nature of their complaints—were Novartis and Novo Nordisk, though their cases will be decided later. Other companies that have brought lawsuits include Merck & Co. and Boehringer Ingelheim.
On Tuesday, Patients for Affordable Drugs blasted the appeal by AstraZeneca. The organization pointed out that the company has raised the price of Farxiga by 54% over the last decade, with the product generating more than $19 billion in sales over the years, including $6 billion last year. The diabetes and heart disease drug is among those under negotiation.
“This move by AstraZeneca disregards the urgent reality faced by millions of patients desperate for relief from abusive drug prices,” the organization wrote. “Despite a judge rejecting the industry’s core constitutional claims just hours earlier, AstraZeneca has decided to double down on its efforts to go against the will of 4-out-of-5 Americans who overwhelmingly support the implementation of Medicare negotiation.”