Drugmakers urge appeals court to revive challenge to US drug price negotiation program

Reuters

Drugmakers urge appeals court to revive challenge to US drug price negotiation program

9:26 chiều giờ GMT, 30 Tháng 10 2024

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By Brendan Pierson

Oct 30 (Reuters) -Lawyers for AstraZeneca AZN.L, Bristol Myers Squibb BMY.N and Johnson & Johnson's JNJ.N Janssen on Wednesday urged a federal appeals court in Philadelphia to revive their lawsuits challenging the first-ever U.S. law requiring pharmaceutical companies to negotiate drug prices with the government's Medicare health insurance program that covers 66 million people.

AstraZeneca's diabetes drug Farxiga, Bristol Myers' blood thinner Eliquis and Janssen's blood thinner Xarelto are all among the 10 drugs chosen for the first round of negotiations under the program, and have had their prices slashed between 56% and 68% as a result.

The new prices will go into effect in 2026 and are projected to save Medicare about $6 billion in the first year.

The companies argue that the program - part of the Inflation Reduction Act, a signature initiative of President Joe Biden - amounts to a taking of their property without compensation, violating the U.S. Constitution. Lower courts in Delaware and New Jersey earlier this year rejected the companies' challenges.

Yaakov Roth of Jones Day, arguing for Bristol Myers, told a three-judge panel of the 3rd U.S. Circuit Court of Appeals on Wednesday that the law does not give the companies a choice to negotiate but is instead a "gun to the head," since a company that refuses to negotiate must pay exorbitant fines or drop out entirely from Medicare, which represents close to half of the prescription drug market.

Catherine Padhi, a lawyer at the U.S. Department of Justice, said that "the government is allowed to use its purchasing power" to further its goals and "is offering plaintiffs a very good deal."

Kevin King of Covington & Burling, a lawyer for Janssen, made a separate argument that the law violated companies' free speech rights under the First Amendment of the Constitution by requiring them to agree to a "maximum fair price," even if they do not agree that it is fair.

"The government cannot compel regulated parties to speak the government's preferred message," King said.

Padhi countered that "maximum fair price" is a "statutory term of art" that "does not reflect a subjective value judgment."

The panel, which consisted of Circuit Judges Thomas Hardiman, Peter Phipps and Arianna Freeman, did not clearly indicate how it would rule.

Hardiman, who dominated the questioning, said that the program could be seen as the government using its "leverage" to force drugmakers to give up their property. But he also said that the drugmakers were trying to "have their cake and eat it too" by benefiting from the "massive purchasing power of the government...at free market pricing," and that the program had "laudable goal" of stopping "this runaway train of federal budget deficits."

So far, drugmakers' legal challenges to the pricing program have largely fallen short. In September, however, the Texas-based 5th U.S. Circuit Court of Appeals revived a lawsuit by the nation's largest drug industry lobbying group, Pharmaceutical Research and Manufacturers of America, and others.

The cases are AstraZeneca v. Becerra, No. 24-1819, and Bristol Myers Squibb et al v. Becerra, No. 24-1820, 3rd U.S. Circuit Court of Appeals.

For AstraZeneca: Cate Stetson of Hogan Lovells

For Bristol Myers: Yaakov Roth of Jones Day

For Janssen: Kevin King of Covington & Burling

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(Reporting By Brendan Pierson in New York)

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