Like clockwork, another lawsuit challenging the constitutionality of the Inflation Reduction Act's (IRA's) price-setting measures has been shot down in the courts.
One after another, arguments from drugmakers across the industry have been rejected after their lawyers began raising complaints last year. This time, Novo Nordisk’s litigation has fallen flat in a ruling that came just one day before the Aug. 1 closing of Medicare’s drug price negotiations period.
Novo, like other companies affected by the first round of pricing negotiations, raised questions over the “voluntary” aspect of the pricing measure. Given that Medicare and Medicare are such major payers in the U.S. drug industry, several companies raised the argument that they were not presented a realistic choice when they were told to either leave the federal healthcare programs or submit to the negotiations.
The company also argued that the legislation violates its free speech rights and raised concerns relating to the separation of powers between government branches.
District Judge Zahid Quraishi had previously issued a ruling on Johnson & Johnson and Bristol Myers Squibb’s joint motion against the IRA. In that decision, Quaraishi emphasized the choice that the companies have in selling drugs through Medicare, regardless of the potential ramifications for their businesses.
In his rejection of Novo’s motion for summary judgment, the judge upheld his prior reasoning and ultimately concluded that participation in the negotiations is in fact voluntary and that the IRA does not violate the constitutional mandates raised by the company. Conversely, the judge granted the government's motion for summary judgment.
“We are disappointed that the New Jersey federal district court denied our motion for summary judgment,” a Novo spokesperson said in an emailed statement. “We believe the decision fails to appreciate the serious constitutional problems raised by the Inflation Reduction Act’s unprecedented drug price control provisions. We intend to pursue an immediate appeal.”
The Novo ruling is just the latest in the pharma industry’s so far losing battle against the IRA.
Most recently, Boehringer Ingelheim saw the same result from the U.S. District Court for the District of Connecticut, when a judge denied each of BI’s claims and found that the “voluntary” definition sticks because the drugmaker was “free to withdraw from Medicare and Medicaid before the deadline for signing the manufacturer agreement."
AstraZeneca’s rejection from a Delaware court came in March while Johnson & Johnson and Bristol Myers Squibb’s followed in late April. The latter two companies pledged to appeal, while AstraZeneca at the time said it is “actively evaluating” its path forward.
Outside of those cases, a Texas judge in February tossed a similar lawsuit brought by the lobbying group PhRMA.
Despite their complaints, each of the drugmakers with products affected by the negotiations agreed to participate in the process back in October. The Centers for Medicare & Medicaid Services will publish its “maximum fair prices” for the 10 drugs on Sept. 1.