Judge rejects J&J, Bristol-Myers Scoob challenge to Medicare drug price negotiations

A federal judge in New Jersey on Monday refused. Johnson & Johnson‘The sand Bristol Myers SquibbLegal challenges to the Biden administration’s Medicare drug price negotiations, saying the program is constitutional.

The decision is another victory in the White House’s bitter legal battle with several drugmakers over price negotiations. The decision also undermines the pharmaceutical industry’s strategy of seeking separate rulings in lower courts across the United States, allowing the case to go all the way to the Supreme Court.

Medicare drug price negotiations are a key policy under President Joe Biden’s Inflation Reduction Act, which aims to make expensive drugs more affordable for seniors. By doing so, it can take some of the profits out of drug makers. Final negotiated prices for the first round of negotiable drugs, including one each from J&J and Bristol-Myers, will take effect in 2026.

J&J and Bristol-Myers Squibb did not immediately respond to requests for comment on the decision.

In separate lawsuits, drug dealers argued that the negotiations constituted an unconstitutional seizure of their drugs by the government and a violation of their right to free speech. They also argued that negotiation is an unconstitutional requirement for participation in the Medicaid and Medicare programs.

But District of New Jersey Judge Zahid Qureshi wrote in a 26-page opinion that price negotiations and participation in the Medicare and Medicaid markets are voluntary.

He wrote that the negotiations do not require drugmakers to “separate, store or otherwise preserve any of their drugs” for use by the government or Medicare beneficiaries. Qureshi added that the talks do not force manufacturers to physically ship or transport drugs at the cost of new talks.

“Selling Medicare may be less profitable than before the program was instituted, but it doesn’t help. [J&J and Bristol Myers Squibb’s] Any less voluntary participation,” Qureshi wrote. “For the reasons provided, the court concludes that the program does not result in the physical taking of drugs from the two drug manufacturers and Direct Appropriation”.

During the same hearing in March, J&J, Bristol-Myers Squibb, Novo Nordisk and Novartis presented oral arguments to Qureshi.

That same month, a federal judge in Delaware dismissed AstraZeneca’s separate lawsuit challenging the negotiations. In Texas, a third federal judge ruled in a separate case in February.

A federal judge in Ohio also issued an order in September denying a preliminary injunction sought by the Chamber of Commerce, one of the nation’s largest lobbying groups, aimed at Oct. 1. The first was to stop price negotiations.