AstraZeneca, the global pharmaceutical company, has experienced a judicial setback in its lawsuit opposing Medicare’s drug pricing negotiation policy. The federal judge presiding the case ruled that the company did not possess standing to challenge the legislation that established the program. The judge also stated that AstraZeneca did not hold a constitutionally safeguarded property interest in the case.
The decision handed down on Friday is the first among several comparable lawsuits lodged by pharmaceutical firms protesting certain sections of the Inflation Reduction Act (IRA). Many of these lawsuits present constitutional claims echoing those presented by AstraZeneca.
Considering the ten drugs without generic competition and representing over $50 billion in Medicare Part D costs from June 1, 2022, to May 31, 2023, one of them is the renowned AstraZeneca medication Farxiga, approved for type 2 diabetes, heart failure, and chronic kidney disease. It was selected by CMS for cost negotiation as reported by MedCity News.
In their argument, AstraZeneca claimed that including Farxiga in the drug list constituted a violation of the federal Administrative Procedure Act. This, according to the firm, reduces the incentive for innovative new uses of the drug, subsequently restricting patient access to fresh treatments. Further, AstraZeneca contested the constitutionality of IRA.
In response to these claims, the presiding judge, Colm Connolly, asserted that the potential loss or reduction of an incentive to innovate could not be considered a concrete damage. He noted that the damages claimed by AstraZeneca were speculative, and their advent hinged on a number of conditional ‘ifs’.
Additionally, Connolly disputed AstraZeneca’s claim that the IRA violated its rights as defined under the Fifth Amendment. The amendment, amongst other things, states that no one shall be “deprived of life, liberty, or property without due process of law.” In Connolly’s view, expecting or wishing to sell drugs at previously enjoyed high prices does not create a protected property interest. He stated plainly that no one can claim an entitlement to sell to the government at prices it is unwilling to pay.
The case was tried in the U.S District Court for the District of Delaware. It is one of eight similar cases lodged by pharmaceutical companies against the IRA. A similar suit by an industry group was recently dismissed by a Texas judge on the basis of improper venue.
Post the ruling, AstraZeneca issued a statement expressing disappointment and alluding to a negative impact on patients’ access to future life-saving medicines. The company shared that it is currently assessing its options.
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