With one week to go until the Centers for Medicare & Medicaid Services (CMS) releases its list of ten drugs up for the first round of pricing negotiations, AstraZeneca is jumping into the legal battle around the Inflation Reduction Act (IRA).
Unlike lawsuits from other drugmakers that hinge on constitutional arguments, AZ’s case centers on the 1983 Orphan Drug Act (ODA) and the “unintended consequences” of the new law. In a statement, the company said the IRA's Medicare price negotiation measures "run headlong into the goals" of the ODA.
The ODA provides a seven-year market exclusivity period to encourage the development of therapies for rare and orphan diseases, AZ pointed out. Since the law's passage, more than 600 medicines targeting 1,000 rare diseases have hit the market, the company said.
But there is still work to be done. Most of the 7,000 known rare conditions still have no approved treatment, according to AZ.
“If today’s version of the law stands, patients in the United States with rare conditions, who have benefited from the Orphan Drug Act, will get delayed access to scientific breakthroughs relative to other parts of the world," Dave Fredrickson, executive vice president of AZ’s oncology business unit, said in a statement.
The IRA mandates that certain small molecule drugs be subject to Medicare drug-pricing negotiations after nine years, while biologics can enjoy 13 years on the market before they’re up for price reductions.
AZ argued its Merck-partnered cancer drug Lynparza is one example of how the IRA's framework is flawed.
The small molecule drug won its original FDA approval in 2014 for a small population of late-line ovarian cancer patients. Nine years later, its label this summer grew to include prostate cancer.
But AZ says if the IRA had been in place upon Lynparza’s original approval, “significant disincentives” could have deterred the company from pursuing that rarer first indication.
Then there's Soliris, a drug cleared to treat four rare diseases that AZ picked up in its $39 billion buyout of Alexion. After its original 2007 approval in the rare chronic blood disorder paroxysmal nocturnal haemoglobinuria, the drug scored a new use in rare autoimmune disease neuromyelitis optica spectrum disorder more than a decade later in 2019.
Soliris’ continued development after its original use wouldn’t have been possible under the IRA, AZ says.
AZ is the sixth drugmaker to join in the litigation parade around the IRA following other lawsuits from Merck, Bristol Myers Squibb, Johnson & Johnson, Astellas and recently most Boehringer Ingelheim. Aside from the drugmakers, trade group Pharmaceutical Research and Manufacturers of America and the U.S. Chamber of Commerce are challenging the law.
Meanwhile, the CMS is set to release the first list of drugs expected to face Medicare drug price negotiations—starting in 2026—next week.