When the Biden administration welcomed the passing of the Inflation Reduction Act (IRA) in August 2022, it marked a rare defeat for the pharmaceutical industry in Washington, D.C. Naturally, drugmakers didn't lie down without a fight on the controversial topic of Medicare price negotiations.
Now, new developments show that the Biden administration is willing to go to the mat in defense of the IRA negotiations.
Wednesday, lawyers for AstraZeneca are set to engage in oral arguments against the U.S. Department of Justice in a federal court, according to a September court order and a new report from Bloomberg Law. The British drugmaker aims to challenge the legality of the drug pricing provisions put in place under the IRA, which will allow Medicare to haggle over the prices of some of the costliest drugs it covers starting in 2026.
AstraZeneca’s diabetes blockbuster Farxiga ranks among the 10 drugs that were selected for the initial round of pricing talks. As it stands, the Centers for Medicare & Medicaid Services’ (CMS) will publish its first pricing offer on the drug by Feb. 1, and AZ will have until March 2 to respond.
AZ’s arguments center on alleged violations of the Administrative Procedure Act—essentially the implementation of the law—and alleged constitutional infringements, according to the September court order.
AZ joined the parade of pharma majors challenging the IRA in court back in August 2023. While many companies have raised constitutional arguments, AZ further brought up the Orphan Drug Act and the “unintended consequences” of the law.
The company's case is the first to reach a hearing for oral arguments, Politico reports.
Separately this week, lawyers for the Department of Health and Human Services (HHS) hit out against Novo Nordisk's IRA lawsuit in a new motion for summary judgment.
While Novo argues that the price-negotiation program in the IRA hampers its First and Fifth Amendment rights, HHS disagrees. The agency claims Novo's constitutional rights aren’t infringed because drugmakers aren’t legally compelled to participate in the Medicare program.
In all, there are nine legal challenges to the IRA's Medicare price negotiations, Bloomberg Law reports. Besides AZ and Novo, companies including Merck, Johnson & Johnson, Boehringer Ingelheim and Bristol Myers Squibb have challenged the law in court.
Meanwhile, the Medicare negotiation process is moving forward. On Feb. 1, CMS will publish its initial offers for the 10 drugs affected by the first round of talks. The agency then plans to set final prices by Sept. 1.

https://www.fiercepharma.com/pharma/astrazeneca-gears-battle-ira-court-novos-own-challenge-faces-hhs-rebuke