Activists protest prescription drug prices in front of the U.S. Department of Health and Human Services building on October 6, 2022 in Washington, DC.
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On Friday, a federal judge dismissed the AstraZenecaA legal challenge has arisen against Medicare’s new power to negotiate with manufacturers over the price of certain expensive prescription drugs.
The decision is another victory for the Biden administration in its bitter legal battle with the drug industry over whether these price negotiations are constitutional.Negotiation is the key policy in the new situation Inflation reduction method The plan aims to make drugs more affordable for seniors and could reduce profits for the pharmaceutical industry.
The legal debate over the policy is far from over. The manufacturers said they intend to take the issue to the Supreme Court.
The judge’s decision came a day before a key deadline in the process.
Manufacturers of the first 10 drugs selected for negotiations have until Saturday to respond to Medicare’s initial bids for their treatments. The drugs include AstraZeneca’s Farxiga, used to treat type 2 diabetes, chronic kidney disease and heart failure.
The final negotiated prices for the first round of drugs will take effect in 2026.
U.S. District Judge Colm Connolly of Delaware said in a 47-page opinion that AstraZeneca had not established that constitutionally protected property would be harmed by price negotiations.
He wrote that AstraZeneca’s participation in the health insurance market is voluntary, so the company’s “desire” or even “expectation” to sell the drug to the government at “the higher prices it once enjoyed” does not create a protected property interest. .
Connolly wrote that the opportunity to sell drugs to more than 49 million Medicare and Medicaid beneficiaries is a “powerful incentive” for manufacturers to engage in price negotiations with the government. But he said the incentives were not “a gun to the head,” as AstraZeneca described in its lawsuit.
“This is a potential economic opportunity that AstraZeneca is free to accept or reject,” Connolly wrote.
AstraZeneca said in a statement it was “disappointed by the court’s ruling and its potential negative impact on patients’ future access to life-saving medicines.” The company said it is evaluating its path forward.
AstraZeneca’s lawsuit claims the negotiations would force it to sell the drug at a significant discount to market price. The company claimed that this violated due process under the Fifth Amendment, which requires the government to pay reasonable compensation for public use of private property.
The judge’s decision is another blow to the pharmaceutical industry, which has filed a series of lawsuits claiming the negotiations are unconstitutional.
The ruling comes a month after a federal judge in Texas dismissed another lawsuit challenging price negotiations.
A federal judge in Ohio also issued a ruling in September rejecting a preliminary injunction sought by the Chamber of Commerce, one of the nation’s largest lobbying groups. It aims to prevent price negotiations before October 1.
But many other cases remain pending. On March 7, Bristol-Myers Squibb, Novo Nordisk, Novartis and Johnson & Johnson will make oral arguments before a federal judge in New Jersey at the same hearing.
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