Judge rejects J&J, Bristol Myers Squibb challenges to Medicare drug-price negotiations

A
federal
judge
in
New
Jersey
on
Monday
rejected


Johnson
&
Johnson‘s
and


Bristol
Myers
Squibb‘s
legal
challenges
to
the
Biden
administration’s

Medicare
drug-price
negotiations,
ruling
that
the
program
is
constitutional. 

The
decision
is

another
win
for
the
White
House
in
a
bitter
legal
fight
with
several
drugmakers
over
the
price
talks.
The
ruling
also
weakens
the
pharmaceutical
industry’s
strategy
of
seeking

split
decisions
in
lower
courts
scattered
across
the
U.S.,
which
could
escalate
the
issue
to
the
Supreme
Court. 

Medicare
drug-price
negotiations
are
a
key
policy
under
President
Joe
Biden’s
Inflation
Reduction
Act
that
aims
to
make
costly
medications
more
affordable
for
seniors.
In
doing
so,
it
could
take
a
bite
out
of
drugmakers’
profits.
Final
negotiated
prices
for
the
first
round
of
drugs
subject
to
the
talks,
which
includes
one
each
from
J&J
and
Bristol
Myers,
will
go
into
effect
in
2026. 

J&J
plans
to
appeal
the
decision,
a
spokesperson
said
in
a
statement
to
CNBC.

“This
is
a
disappointing
ruling
for
patients
and
America’s
leadership
role
in
medical
innovation,”
they
added.

Bristol
Myers
Squibb
did
not
immediately
respond
to
requests
for
comment
on
the
ruling. 

In
separate
lawsuits,
the
drugmakers
argued
that
the
negotiations
are
an
unconstitutional
confiscation
of
their
drugs
by
the
government
and
a
violation
of
their
right
to
freedom
of
speech.
They
also
argued
that
the
talks
are
an
unconstitutional
condition
to
participate
in
the
Medicaid
and
Medicare
programs.

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

The
negotiations
don’t
require
drugmakers
to “set
aside,
keep
or
otherwise
reserve
any
of
their
drugs”
for
the
use
of
the
government
or
Medicare
beneficiaries,
he
wrote.
Quraishi
added
the
talks
don’t
force
manufacturers
to
physically
transmit
or
transport
drugs
at
a
new
negotiated
price.

“Selling
to
Medicare
may
be
less
profitable
than
it
was
before
the
institution
of
the
Program,
but
that
does
not
make
[J&J
and
Bristol
Myers
Squibb’s]
decision
to
participate
any
less
voluntary,”
Quraishi
wrote. “For
the
reasons
provided,
the
Court
concludes
that
the
Program
does
not
result
in
a
physical
taking
nor
direct
appropriation”
of
medications
from
the
two
drugmakers. 

J&J,
Bristol
Myers
Squibb,
Novo
Nordisk
and
Novartis
presented
their
oral
arguments
before
Quraishi
during
the
same
hearing
in
March.

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

tossed a
separate
lawsuit
in
February.

A
federal
judge
in
Ohio
also
issued
a
ruling
in
September
denying
a preliminary
injunction sought
by
the
Chamber
of
Commerce,
one
of
the
largest
lobbying
groups
in
the
country,
which
aimed
to
block
the
price
talks
before
Oct.
1.