It was another swing and a miss for the biopharma industry on Thursday, when a federal appeals court in Philadelphia unanimously rejected (PDF) a challenge by Novartis on the legality of the Inflation Reduction Act (IRA) Medicare price negotiation program.
It was the second time this month that the U.S. Court of Appeals for the Third Circuit swatted away an IRA challenge from Big Pharma. Last week, the same three-judge panel turned back (PDF) an appeal from Bristol Myers Squibb and Johnson & Johnson, although that decision was split.
Judge Thomas Hardiman, a George W. Bush appointee, registered a dissenting opinion in the appeal brought by BMS and J&J. The other judges on the panel are Joseph Biden appointee Arianna Freeman and Donald Trump appointee Peter Phipps.
In May, the panel unanimously rejected an IRA negotiation appeal from AstraZeneca. The court is also weighing a Medicare price negotiation appeal from Novo Nordisk. The last lever remaining for the drugmakers is to appeal to the U.S. Supreme Court.
"Novartis continues to believe the IRA’s drug price-setting provisions are unconstitutional and will have long-lasting negative consequences for patients," a company spokesperson said. "The provisions undermine the ability to discover and develop life-changing therapies for the people who need them the most. Novartis is disappointed by the Court’s decision and is evaluating next steps."
Novartis filed its original lawsuit two years ago, three days after the Centers for Medicare & Medicaid Services (CMS) revealed that Novartis’ heart failure treatment Entresto was among 10 drugs subject to price negotiations in 2026.
Novartis claimed that the Medicare negotiation setup is an “unconstitutional taking of private property,” which violates the Fifth Amendment. Novartis also argues the CMS action infringes rights established in the First Amendment (free speech) and the Eighth Amendment (excessive fines).
In October 2024, New Jersey District Court Judge Zahid Quraishi dismissed (PDF) Novartis’ suit, writing that it was “nearly identical” to claims he had previously rejected from BMS and J&J.
The Medicare price negotiation losses in court are piling up for the industry. Last month in Connecticut, the U.S. Court of Appeals for the Second Circuit reaffirmed (PDF) a lower court's ruling against Boehringer Ingelheim. On the same day, a federal court in Texas ruled against industry lobbying group PhRMA in another IRA challenge.
After the most recent ruling against Novartis, People For Affordable Drugs (P4AD) counts 14 court decisions backing the U.S. price negotiation program, with no challenges yet to succeed.