Last Friday, Novartis became the seventh drugmaker to legally challenge the White House’s Medicare drug pricing negotiation program. The company filed its lawsuit three days after HHS announced the first 10 drugs covered under Medicare Part D that were selected for the price negotiation program — Novartis’ heart failure medication Entresto was one on the list.
HHS can expect to face more lawsuits from the manufacturers of the 10 drugs it named last week, experts have warned.
The Biden administration’s plan for drug pricing reform seeks to save $25 billion annually by 2031 through negotiating the prices for the most expensive medicines covered by Medicare. The initial 10 drugs that HHS recently announced represented $50.5 billion in total Part D gross covered prescription drug costs (20% of total Part D gross covered prescription drug costs) between June 1, 2022, and May 31, 2023. In 2022, Medicare beneficiaries spent $3.4 billion in out-of-pocket costs for the drugs.
With its lawsuit, Novartis joined Astellas, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Johnson & Johnson and Merck in their efforts to take down the Medicare drug pricing negotiation program. Excluding Astellas, all of these drugmakers have at least one of their drugs on the list HHS announced last week.
Amgen, Eli Lilly, Novo Nordisk and Pfizer have their drugs on the list but haven’t sued HHS over the negotiation plan. However, lawsuits from those companies will likely come soon, legal experts told Bloomberg.
HHS is also facing lawsuits from the U.S. Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America (PhRMA) over the price negotiation plan, as well as a joint complaint filed by the National Infusion Center Association, the Global Colon Cancer Association.
As is the case with the other complaints that have been filed, Novartis’ lawsuit charges that the White House’s plan is unconstitutional.
“The drug price-setting provisions in the [Inflation Reduction Act] represent an unconstitutional taking of pharmaceutical manufacturers’ private property and would impose excessive and crippling fines on any pharmaceutical company that refuses either to participate in the supposedly voluntary ‘negotiations,’ or to accept CMS’ purported ‘maximum fair price’ for a particular drug at the end. The provisions also force the company to endorse views with which it profoundly disagrees, in clear violation of Novartis’ rights under the First Amendment,” the company said in a statement.
Earlier this summer, healthcare law expert Robin Feldman told MedCity News that the plaintiffs going after the drug price negotiation plan will “have a heavy lift” to convince the courts that the plan violates the Constitution. However, she noted that the lawsuits were likely filed with the intention of going all the way to the Supreme Court — so they could still delay when the government’s ability to negotiate price goes into effect.
Additionally, companies with drugs on the list will likely amend their lawsuits to more specifically describe the plan’s potential financial ramifications, which experts say may strengthen their case.
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