J&J, Astellas Join Pharma Lawsuits Over Medicare Drug Price Negotiations

 

Gavel on table

Pictured: Gavel on desk/Courtesy, iStock

Astellas and Johnson & Johnson have filed lawsuits against the Medicare program, challenging the constitutionality of the Inflation Reduction Act’s drug pricing provisions. These legal actions add to a growing wave of litigation from drugmakers seeking to block the implementation of the Medicare Drug Price Negotiation Program.

The IRA, designed to address rising healthcare costs and make medications more affordable for Americans, has faced significant opposition from the pharmaceutical industry.

Friday, Astellas filed a lawsuit challenging the program, arguing that it violates the Fifth Amendment by unlawfully depriving them of their intellectual property rights. The pharma claimed that the IRA's provisions, which allow Medicare to negotiate drug prices directly with manufacturers, amount to an unconstitutional confiscation of their patented drugs.

Tuesday, J&J also filed a lawsuit against the Biden administration over the Medicare Drug Price Negotiation Program. The company asserted in its filing that the program is not a genuine negotiation and alleged that it would result in the unconstitutional seizure of their pharma products.

J&J also objected to the contractual requirement of characterizing the negotiated price as “fair” under the First Amendment. In addition, the company contends that conditioning Medicare coverage eligibility for other drugs on participation in negotiations is also unconstitutional.

Both companies expressed concerns in their respective filings that if they do not comply with the government's dictated terms under the IRA, they may face hefty penalties or be forced to withdraw their products from both Medicare and Medicaid. Such actions could deprive a significant portion of the U.S. patient population, approximately 40%, of essential medications, according to the companies.

Merck, Bristol Myers Squibb, drug lobby PhRMA and the U.S. Chamber of Commerce are among the other organizations that have previously initiated legal challenges against the Medicare Drug Price Negotiation Program. This mounting litigation underscores the deep divisions between the pharma industry and the federal government regarding drug pricing and access to affordable healthcare.

As the lawsuits progress, the outcome of these legal battles could significantly impact the future of drug pricing reforms and Medicare’s ability to negotiate lower drug prices.

Lisa Munger is a senior editor at BioSpace. You can reach her at lisa.munger@biospace.com. Follow her on LinkedIn.

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