Despite a string of high-profile losses this year, at least three major drugmakers continue to fight back against the Medicare price negotiations being rolled out under the Inflation Reduction Act.
On Friday, Johnson & Johnson and Bristol Myers Squibb filed an appeal at the U.S. Court of Appeals for the Third Circuit, arguing that the District Court judge erred in April when he tossed lawsuits by the companies questioning the constitutionality of the Inflation Reduction Act.
Two months before that decision, a Delaware federal court rejected a similar lawsuit by AstraZeneca. AstraZeneca on Monday also filed an opening appeal against that verdict before the Third Circuit.
Much of the pharmaceutical industry has been fighting against the Inflation Reduction Act (IRA) tooth and nail since the bill was passed in summer of 2022. J&J, BMS and AstraZeneca each have drugs up for negotiated prices starting in 2026.
The drugmakers generally argue that the Medicare price negotiations violate their constitutional rights. They allege the process violates the Fifth Amendment by taking private property without proper compensation and the First Amendment by compelling companies to enter agreements that they wouldn't otherwise.
“This convoluted regime serves only to deceive the public and obscure the reality of an unprecedented, top-down government takeover of the U.S. pharmaceutical industry,” BMS wrote in its Friday appeal.
In the original loss for J&J and BMS in April, U.S. District Judge Zahid Quraishi rejected the claim that the drug pricing program constituted an unconstitutional taking of the companies’ assets.
“Selling to Medicare is a choice plaintiffs can accept or not accept,” Quraishi wrote. “[It] may be less profitable than it was before the institution of the program, but that does not make the defendants’ decision to participate any less voluntary.”
Meanwhile, in AstraZeneca’s case—which the British drugmaker originally filed in August of 2023—U.S. District Judge Colm Connolly determined that AstraZeneca lacked a “legitimate claim of entitlement” to sell its drugs to the government at any price other than what the government is willing to pay.
More recently in the IRA legal clash, Boehringer Ingelheim became the latest company to fall short with a lawsuit when the U.S. District Court for the District of Connecticut this month turned away the German drugmaker's case.
Aside from constitutional challenges, BI argued that the Centers for Medicare & Medicaid Services (CMS) didn't fulfill legal requirements with its implementation of the law.
Following the passage of the IRA in August of 2022, the law started requiring drugmakers in October of that year to pay rebates to Medicare if their drug prices rise faster than the rate of inflation. Since then, the law has also capped out of pocket costs for Medicare patients' monthly insulin supplies. Medicare negotiated drug prices, for their part, are set to go into effect in 2026.
Elsewhere, drugmakers aren’t the only ones whose IRA legal efforts have come up short.
In February, industry lobbying powerhouse PhRMA saw its challenge tossed in a Texas federal court because the case “lacked subject matter jurisdiction.”
Prior to that, an Ohio federal court in September knocked back an attempt by the U.S. Chamber of Commerce to delay Medicare price negotiations until IRA litigation has played out.