Even as a new drug pricing specter rears its head in President Donald Trump’s “Most Favored Nation” policies, drugmakers continue to fight Medicare price negotiations under the Biden-era Inflation Reduction Act, albeit with limited success.
Now, following a string of defeats for the industry in challenging the IRA, Hail Mary efforts from a handful of companies to have their criticisms of the law heard by the United States’ High Court have fallen flat.
The Supreme Court declined to hear cases challenging the Biden-era program from AstraZeneca, Johnson & Johnson, Bristol Myers Squibb, Novo Nordisk, Novartis and Boehringer Ingelheim, according to a summary of orders from the Justices issued (PDF) Monday.
Fierce Pharma has reached out to the drugmakers whose cases the Supreme Court has declined to review.
Novo Nordisk is "disappointed with the Supreme Court’s decision to not accept the case and will continue to engage with policymakers and regulators to raise our concerns," a spokesperson for the Danish pharma said in an emailed statement.
"As we’ve stated previously, Novo Nordisk remains opposed to government price setting through the Inflation Reduction Act and has significant concerns about the law and with how CMS implemented the statute," the spokesperson said.
A spokesperson for AstraZeneca echoed the company's disappointment in the outcome, noting in a statement that "[w]e filed a legal challenge to critical aspects of the drug price setting provisions of the Inflation Reduction Act to help protect timely access to medicines for patients and our rights as a company."
The AZ spokesperson added that the company is "considering next steps."
While major pharmas have so far been reluctant to relinquish the fight against IRA, the deferral by the Justices represents something of a final say on the matter.
AstraZeneca’s bid to the Supreme Court last fall followed a similar trajectory for other pharmas who’ve sought to test the IRA through legal arguments. The British pharma ultimately brought its case to SCOTUS in November, after the Third Court of Appeals, in a unanimous decision last May, rejected the company's due process claim challenging IRA’s Medicare price negotiations.
In its petition to SCOTUS last year, AZ argued that the price negotiation program deprived it of its “investment-backed patent rights and the right to sell its drug at market prices,” additionally pointing to potential procedural shortfalls in the price bargaining scheme.
In a refrain familiar to many across the industry, lawyers for AstraZeneca wrote (PDF) last year in their Supreme Court petition that contrary to the program’s framing, the Medicare drug price negotiations baked into IRA involve “no genuine ‘negotiation,’ suggesting that a company’s “only alternative is to withdraw all its drugs from Medicare and Medicaid—depriving patients nationwide of access to critical medicines and foreclosing nearly half the U.S. prescription-drug market.”
The U.S. Chamber of Commerce espoused a similar view in January when it urged the Supreme Court to review Novo Nordisk’s IRA case, which was among those denied for a review Monday.
At the time, the Chamber called the IRA price negotiations “illusory” and argued that the framework imposes “crippling penalties” on manufacturers to force them to lower the costs of their medicines.
Under the language of the IRA, companies that won’t comply with the price negotiation process face an increasing excise tax, or they could choose to withdraw all of their drugs from Medicare and Medicaid coverage. Drugmakers could also face a civil monetary penalty if they refuse to offer select drugs at the new prices reached during negotiations.
Negotiated prices for the first 15 drugs to fall under the IRA’s purview took effect at the start of the year, and the Centers for Medicare & Medicaid Services (CMS) has, in recent months, unveiled the prescriptions it’s targeting for 2027 and 2028 cost reductions, too.
More recently, the second Trump administration has levied its own strategy to rein in high prescription drug costs in the U.S., taking the form of the President’s “Most Favored Nation” strategy, which broadly seeks to balance the prices of certain U.S. drugs with the lowest prices available in certain high-income comparator countries.
Rather than the broad challenges brought by the industry against IRA, many major drugmakers have struck deals with the Trump administration under its MFN agenda, pledging to lower the costs of certain medicines on Medicaid, commit billions of dollars to U.S. manufacturing buildouts and more in exchange for immunity from the administration’s pharmaceutical import tariffs.
Regeneron represents the most recent Big Pharma company to strike a drug pricing deal with the White House, following 16 others that include the likes of Pfizer, Novo, Nordisk, Gilead and Roche, to name a few.
Editor's note: This story has been updated to include statements from Novo Nordisk and AstraZeneca.