Federal Court Rejects Big Pharma’s “Strongest Arguments” Challenging Constitutionality of Medicare Negotiation Program, Marking Another Win For Patients

WASHINGTON, D.C. — Dealing a major blow to Big Pharma’s efforts to block Medicare from negotiating drug prices, a federal district court in New Jersey has ruled against constitutional challenges brought by pharmaceutical giants Bristol Myers Squibb (BMS) and Janssen. The judge rejected the companies’ claims that the Medicare negotiation program, established by the Inflation Reduction Act, forces them to participate, in violation of the Takings Clause and their First Amendment rights. This marks the fourth time that a federal court has scrutinized Big Pharma’s claims and ruled decisively against drug companies and for the people of the United States.

Four medications manufactured by the two big drug companies were among the first 10 drugs selected for negotiation by Medicare — Janssen’s Xarelto, Stelara, and Imbruvica and BMS’s blood thinner Eliquis.

This court decision represents a significant milestone in safeguarding Medicare’s ability to negotiate drug prices, as it delivers the first judicial rejection of the constitutional arguments that were widely viewed as the pharmaceutical industry’s most formidable line of attack. The judge summarized the core issue clearly: “Selling to Medicare is a choice Plaintiffs can accept or not accept. This is true for any negotiation between a purchaser and a seller.”

Merith Basey, Executive Director of Patients For Affordable Drugs, issued the following statement: 

“There is no doubt that this ruling is a win for patients. It eviscerates the strongest arguments in Big Pharma’s coordinated multi-million dollar attack on Medicare negotiation, a program overwhelmingly supported by Americans. The judge’s unequivocal rejection of the legal arguments presented by Janssen and BMS demolishes the drug industry’s entire legal strategy — one fundamentally rooted in prioritizing profits over patients’ health and wellbeing. The judge’s decision reaffirms that pharmaceutical corporations are free to sell to Medicare voluntarily, even if this means they must accept slightly lower negotiated prices to continue to access a market worth billions.

“Patients For Affordable Drugs remains unwavering in our commitment to thwarting the pharmaceutical industry’s relentless attempts to weaponize the legal system against policies essential to reducing exorbitant drug costs and ensuring patients can access the medications they need at prices they can afford.”

This ruling represents a victory for patients like Ralph from Sterling Heights, Michigan, who struggles to afford his Eliquis – BMS’s blockbuster drug – due to its high price tag. Ralph shared with P4AD, ”[Eliquis] would cost me $479.00 per month out of my pocket to fill. I’m on Social Security and I can’t afford it.” After negotiation, Eliquis’s price could be reduced to $123 per month. Ralph’s story underscores the importance of Medicare negotiation in ensuring patients can better access the essential treatments they need at affordable prices.

In addition to these two lawsuits, the pharmaceutical industry and its allies still have several other cases moving through the courts in a continued attempt to block the implementation of the historic Medicare Negotiation program. AstraZeneca is facing an April 30th deadline to file a notice of appeal in their case, and the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s top trade association, alongside the Global Colon Cancer Association and the National Infusion Center Association, will have oral arguments heard in their appeal on Wednesday, May 1st.

Background:

• Patients For Affordable Drugs Now has signed onto seven amicus briefs – including in these cases – led by Public Citizen and supported by Protect Our Care, Doctors for America, and Families USA to support the government’s opposition and explain the harm high drug prices have on people on Medicare.
• In 2022, total revenue generated from sales of Xarelto, Stelara, and Imbruvica accounted for $19.06 billion in revenue for Janssen.
• In 2022, total revenue generated from sales of Eliquis reached over $11.8 billion for BMS.
• Unlike every other sector in health care where Medicare sets prices such as doctor fees, hospital costs, and equipment, pharmaceutical companies have been exempt from any form of negotiation. Pharmaceutical companies have the option to participate in Medicare voluntarily. They can accept slightly lower negotiated prices if they want to tap that huge market worth billions.
• On Feb. 1, the Centers for Medicare and Medicaid Services sent initial offers of a fair price for each of the 10 drugs. Negotiation will run through Aug. 1 and on Sept. 1, the maximum fair prices will be announced, according to CMS.