After PhRMA loss, AstraZeneca's challenge to IRA price negotiations is rejected

Less than three weeks after a Texas judge tossed a lawsuit by industry lobbying group PhRMA that challenged the constitutionality of the Inflation Reduction Act (IRA), a federal court in Delaware has done the same with a similar action brought by AstraZeneca.

The company brought the suit in August of last year after its diabetes, kidney and heart drug Farxiga was named one of 10 products that will face Medicare price negotiations in 2026. Several other companies with drugs on the list have also filed lawsuits.

“Because AstraZeneca has no legitimate claim of entitlement to sell its drugs to the government at any price other than what the government is willing to pay, its due process claim fails as a matter of law,” U.S. District Judge Colm Connolly wrote in his opinion.

AZ’s challenge differed from those of other drugmakers as the company homed in on the 1983 Orphan Drug Act (ODA), arguing that Medicare price negotiations “run headlong into the goals” of the ODA.

AZ also alleged violations of the Administrative Procedure Act (APA) and constitutional infringements. Its arguments around the APA focused on the implementation of the law.

“AstraZeneca’s ‘desire’ or even ‘expectation’ to sell its drugs to the government at the higher prices it once enjoyed does not create a protected property interest,” Connolly added.

In a statement, AZ said it's "disappointed" and will assess its options.

“We believe our challenge is necessary to support and improve patients’ access to future life-saving medicines and our rights as a company," an AZ spokesperson said. "There is a lot at stake here, and we are actively evaluating our path forward.”

Aside from AZ, Big Pharma companies including Johnson & Johnson, Bristol Myers Squibb, Novo Nordisk and Merck have filed lawsuits challenging the IRA. In New Jersey, those companies have banded together to present arguments at a joint hearing next week.