More drugmakers sue over IRA yet one withdraws

Home/Policies & Legislation | Posted 10/10/2023 post-comment0 Post your comment

In the United States, Boehringer and Novartis join other drugmakers [1] in suing the US government over drug price negotiations in the Inflation Reduction Act (IRA). However, Japan-based Astellas Pharma withdrew its lawsuit filed against the US government in early September 2023.

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Boehringer and Novartis join Johnson & Johnson, Merck and Bristol Myers Squibb and some American healthcare associations, in claiming that price negotiations by Medicare violate the First and Fifth Amendments of the US Constitution. Here, the companies argue that the law forces price cuts and will stifle drug development.

IRA authorized Medicare to directly negotiate drug prices for select medications. IRA has been designed to address the rapid rate of increase in Part B drug spending and lower costs for Medicare enrollees. However, the pharmaceutical industry has repeatedly criticized many of the law’s drug pricing provisions, arguing they will limit incentives for future treatment innovation. Despite this, the Biden Administration continues to support the IRA, arguing that the IRA’s drug pricing provisions are working to help to lower healthcare costs for seniors and people with disabilities [2].  

The full list of 10 drugs selected by the US Department for Health and Human Security (US HSS) for negotiation was announced at the end of August 2023 [3]. Medicare is now able to negotiate prices directly with drug companies, with the aim of lowering prices on some of the costliest prescription drugs. The negotiations with participating drug companies will occur in 2023 and 2024, and any negotiated prices will become effective beginning in 2026. There will be further rounds of drugs selected in coming years.

Boehringer and Novartis both produce drugs that are on the first list of drugs selected for negotiation. Respectively, these are Type 2 diabetes treatment Jardiance and top-selling heart-failure medicine Entresto. Merck and Bristol Myers Squibb drug products were also included in the list of 10 drugs, however, Astellas Pharma’s prostrate drug was not included.

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References
1. GaBI Online - Generics and Biosimilars Initiative. Four drugmakers sue the US government over the Inflation Reduction Act [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2023 Oct 10]. Available from: www.gabionline.net/pharma-news/four-drugmakers-sue-the-us-government-over-the-inflation-reduction-act
2. GaBI Online - Generics and Biosimilars Initiative. Inflation Reduction Act explained [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2023 Oct 10]. Available from: www.gabionline.net/policies-legislation/inflation-reduction-act-explained
3. GaBI Online - Generics and Biosimilars Initiative. First drugs for Medicare price negotiation selected [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2023 Oct 10]. Available from: www.gabionline.net/policies-legislation/first-drugs-for-medicare-price-negotiation-selected

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