drug price protest

A demonstrator hold a sign demanding lower drug prices during a protest in Manhattan, New York on August 16, 2023.

(Photo: Erik McGregor/LightRocket via Getty Images)

Federal Judge Dismisses Pharma Giant's Challenge to Medicare Drug Price Negotiations

"The court has rejected AstraZeneca's self-serving arguments and essentially said the company didn't have a leg to stand on," said one advocate.

The president of consumer advocacy group Public Citizen on Friday urged Big Pharma to "drop its far-fetched lawsuits and accept that the era of Medicare price negotiation is here to stay," after a federal judge in Delaware rejected drug company AstraZeneca's case challenging provisions under the Inflation Reduction Act.

AstraZeneca Pharmaceuticals LP et al. v. Becerra et al. is one of several cases that drug companies have filed against the federal government seeking to block Medicare from negotiating drug prices on behalf of patients—as the governments of every other high-income country do, with Americans paying as much as four times what people in countries such as the United Kingdom and Canada pay for their medications.

The company claimed that the Centers for Medicare & Medicaid Services violated the Administrative Procedure Act.

Chief Judge Colm Connolly in the U.S. District Court for the District of Delaware ruled that "because AstraZeneca's participation in Medicare is not involuntary, AstraZeneca does not have a protected property interest in selling drugs to the government at prices the government will not agree to pay. Accordingly, AstraZeneca's due process claim fails as a matter of law."

"Drug corporations have no constitutional right to price gouge Medicare, contrary to Big Pharma's claims."

In other words, said Patients for Affordable Drugs (P4AD), the judge emphasized that "the company's desire for higher prices does not supersede the government's ability to protect patient interests."

"On behalf of patients across this country, we are encouraged but not surprised that the court has rejected AstraZeneca's self-serving arguments and essentially said the company didn't have a leg to stand on," said Merith Basey, the group's executive director. "This ruling sends a clear message that Big Pharma's greed cannot continue to be prioritized over patients' well-being and underscores the importance of Medicare negotiation to begin to rein in exorbitant drug prices."

"The judge's decision reaffirms that pharmaceutical companies like AstraZeneca have the option to participate in Medicare voluntarily, accepting slightly lower negotiated prices if they wish to access a market worth billions," added Basey. "Once again, a judge has reviewed drug company claims, and the result has gone against the drug company and for the people of the United States."

AstraZeneca's drug Farxiga, which is used to treat Type 2 diabetes, was one of 10 medications selected by the Biden administration last year for the first round of negotiations under the Inflation Reduction Act's (IRA) Medicare Drug Price Negotiation Program. In 2022, the company reported nearly $4.4 billion in revenue from Farxiga.

P4AD said Connolly's ruling was a victory for patients like Karen, a Pueblo West, Colorado resident.

"I am on Medicare and was prescribed Farxiga with a bill of over $600 for a three-month supply. I am on a fixed income and can no way afford that amount of money," Karen told the group, which has signed onto amicus briefs in seven different cases regarding Medicare price negotiations.

Tony Carrk, executive director of Accountable.US, noted that Big Pharma previously spent millions lobbying against the drug price negotiation provisions in the IRA.

“Big drug company executives are stopping at nothing to price gouge Americans and pad their profits," said Carrk. "Now they are trying to do it by clogging the judicial system with meritless lawsuits. Today's ruling is a victory for the Biden administration's historic cost-lowering program and for seniors who need lower prescription drug costs."

Robert Weissman, president of Public Citizen, pointed out that the IRA's restraints on Big Pharma's price gouging are only "modest" but will make a difference to seniors, saving $100 billion over a decade.

"In response, Big Pharma has launched a flurry of preposterous lawsuits against the Medicare drug negotiation provisions in the Inflation Reduction Act," said Weissman. "As Public Citizen has argued in amicus briefs, drug corporations have no constitutional right to price gouge Medicare, contrary to Big Pharma's claims."

Weissman said his expects that with seven pending cases, "today's decision is the first of many rejecting Big Pharma's attack on the act's effort to rein in exorbitant prescription drug prices."

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