4 top drugmakers present their case to overturn Medicare price negotiation program

Four leading drugmakers were back in federal court on Thursday to challenge the constitutionality of the Medicare Drug Price Negotiation Program under the Inflation Reduction Act.

Bristol Myers Squibb, Novo Nordisk, Novartis and Johnson & Johnson presented their arguments to Judge Zahid N. Quraishi of the U.S. District Court for the District of New Jersey. This hearing was different from the others in that the court allowed the four companies to present their oral arguments in a single session.

If court observers are correct, they may not be any more successful than other pharmaceutical companies were in two previous lawsuits in which courts ruled against the plaintiffs. Judge Quraishi was particularly doubtful about the companies’ position that the negotiation program amounted to an unconstitutional taking of their property, according to Law360. Endpoints News reported that the judge also seemed unconvinced that the negotiations were not voluntary.

The program selects high-priced drugs for negotiation and imposes an excise tax if companies refuse to participate or comply with the maximum fair price ultimately set by Medicare. Attorneys argued that the program violates compelled speech under the First Amendment, the Fifth Amendment takings clause and due process, and excessive fines under the Eighth Amendment.

Brian David Netter, deputy assistant attorney general for the Federal Programs Branch at the U.S. Department of Justice, countered that choosing to sell drugs to Medicare, like participating in other federal health programs, is voluntary and that drug companies have the option of not selling their drugs to Medicare.

Merith Basey, executive director of the patient advocacy group Patients for Affordable Drugs, submitted a statement saying that the companies’ lawsuits against the drug negotiation program “would not only jeopardize access to vital medications for millions of Americans but also squander the opportunity for close to $100 billion in savings for taxpayers.”

Related: Medicare drug price negotiations begin, as CMS sends initial offers to top drugmakers

Drugmakers have not fared well in challenging the price negotiation program to this point.

Earlier this month, a federal judge in Delaware ruled in favor of the Biden administration in AstraZeneca’s challenge because it “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.”  And in February, a federal judge in Texas dismissed a lawsuit brought by the industry group PhRMA.