Merck and AstraZeneca have suffered fresh legal defeats in their efforts to block the government’s Medicare drug price negotiation programme under the Inflation Reduction Act.
The U.S. Court of Appeals for the Third Circuit in Washington, D.C., ruled against Merck on Monday, rejecting its claim that the price negotiations are unconstitutional under the First and Fifth Amendments.
A federal court in Maryland had dismissed an AstraZeneca lawsuit just five days earlier, which alleged the government improperly grouped its drugs together to reach eligibility thresholds for the price reduction programme.
The rulings extend a long string of courtroom losses for the pharmaceutical industry since the negotiation rules were introduced in 2022 under former President Joe Biden.
In May, the U.S. Supreme Court declined to hear cases brought by Johnson and Johnson, Bristol Myers Squibb, Novo Nordisk, Novartis, Boehringer Ingelheim, and a prior AstraZeneca lawsuit after all had been rejected by lower courts.
Teva secured a rare partial victory last week when the federal appeals court in Washington sent a previous ruling back to District Court for further review concerning generic drug marketing requirements.
However, the court rejected a separate Teva challenge, upholding the decision by the Centers for Medicare and Medicaid Services to classify Austedo and its extended-release version, Austedo XR, as a single drug.
Merck’s challenge, dismissed by Judge Colleen Kollar-Kotelly, failed to demonstrate that the negotiation programme violated the First Amendment by compelling drugmakers to publicly endorse a government position against their will.
The court also found that Merck failed to show the programme constituted a government “taking” of private property without just compensation, which would have triggered a Fifth Amendment violation.
Kollar-Kotelly ruled that companies are free to determine whether they participate in the programme, undermining Merck’s core constitutional argument.
Merck was the first company to challenge the price negotiation scheme back in 2022, with its drug Januvia among the first ten selected for inclusion in the programme.
Monday’s ruling was welcomed by advocacy group Patients for Affordable Drugs, whose director of media and communications, Emma Sands, said the pharma industry has spent three years and millions of dollars fighting the programme.
“Again and again, their arguments have failed in the courtroom,” Sands said. “This is a win for patients who fought for this program and are already seeing the lower prices it delivers.”
Sands argued in her statement that the programme is “overwhelmingly supported by American patients and Taxpayers,” adding further political pressure on drugmakers pursuing further legal challenges.