AstraZeneca’s Medicare drug pricing lawsuit dismissed by federal judge

A federal judge in Delaware on Friday ruled in favor of the Biden administration in AstraZeneca’s attempt to overturn Medicare drug price negotiations under the Inflation Reduction Act. This was the second failed challenge to the law in the past month.

U.S. District Judge Colm Connolly’s decision came the day before the drugmaker was due to respond to the U.S. government’s initial bid for the price of its diabetes drug Farxiga. The opinion made clear that AstraZeneca’s constitutional challenge should not move forward because the company “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,” meaning “its due process claim fails as a matter of 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,” according to the ruling.

A spokesperson for AstraZeneca said in a statement to Endpoints News that it was disappointed with the court’s decision and would explore its options. “We believe our challenge is necessary to support and improve patients’ access to future lifesaving medicines, and our rights as a company,” the statement said. “There is a lot at stake here, and we are actively evaluating our path forward.”

The IRA authorized Medicare to directly negotiate prices for select medications. Part B drugs may be eligible to be selected for negotiation starting in in 2026 for prices effective in 2028. Manufacturers are required to pay a rebate to Medicare if a drug’s price increase exceeds the rate of inflation. Drugmakers that refuse to participate must either pay heavy fines or withdraw altogether from Medicare.

The Centers for Medicare & Medicaid Services selected Farxiga as one of the first 10 drugs to be negotiated Other drugs chosen for the first round of negotiations include Bristol-Myers Squibb and Pfizer’s blood thinner Eliquis, Merck & Co’s diabetes drug Januvia and Johnson & Johnson’s blood thinner Xarelto.

AstraZeneca and nearly a dozen of its peers filed suit over the negotiations for a variety of constitutional and other reasons, but so far the suits have struggled to muster momentum.

Last month, a federal judge in Texas dismissed a lawsuit brought by the industry group PhRMA. The group had sued the administration last June, and the National Infusion Center Association and the Global Colon Cancer Association joined the lawsuit. In addition, an Ohio judge last year denied an attempt by the Chamber of Commerce to immediately stop the drug negotiation program’s implementation.

Related: Judge tosses PhRMA lawsuit over Medicare drug price negotiations

The plaintiffs argued that the Inflation Reduction Act delegated too much power to the Department of Health and Human Services and violated drug companies’ due process. The Department of Justice countered that the infusion association, the only plaintiff based in Texas, lacked standing because it doesn’t manufacture or sell prescription drugs that could be subject to negotiation.

Four other companies — Bristol Myers Squibb, Johnson & Johnson’s Janssen Pharmaceuticals, Novartis and Novo Nordisk – will present their cases before a New Jersey federal judge on March 7.