Even as the specter of new drug prices looms over President Donald Trump’s Most Favored Nation policy, drug companies continue to fight Medicare price negotiations under the Biden-era Inflation Control Act, with limited success.
Hail Mary efforts by a small number of companies to have their criticisms of the law heard in the U.S. high court have failed, as the industry has suffered a series of defeats challenging the IRA.
The Supreme Court declined to hear lawsuits challenging the Biden-era program from AstraZeneca, Johnson & Johnson, Bristol-Myers Squibb, Novo Nordisk, Novartis and Boehringer Ingelheim, according to a summary (PDF) of the justices’ order issued Monday.
Fierce Pharma contacted the drug companies whose cases the Supreme Court refused to hear.
In an emailed statement, a spokesperson for the Danish drugmaker said Novo Nordisk was “disappointed by the Supreme Court’s decision not to accept the case and will continue to express our concerns with policymakers and regulators.”
“As we have previously stated, Novo Nordisk remains opposed to government price-setting under the Inflation Control Act and has serious concerns about the Act and how CMS is implementing it,” the spokesperson said.
An AZ spokesperson told Fierce that the company did not have a statement to announce about the SCOTUS decision.
Big drug companies have so far been reluctant to give up their fight against the IRA, but the judges’ delay means they have something of a final say on the matter.
AstraZeneca’s Supreme Court filing last fall followed a similar trajectory for other drug companies that have sought to examine the IRA through legal arguments. The British drugmaker finally filed suit with SCOTUS in November after a unanimous decision by the Third Court of Appeals last May denied the company’s due process claims challenging the IRA’s Medicare price negotiations.
In a petition to SCOTUS last year, AZ argued that the price negotiation program stripped the company of its “investment-backed patent rights and right to sell its medicines at market prices,” and also pointed to possible procedural deficiencies in the price negotiation scheme.
In a refrain familiar to many in the industry, AstraZeneca lawyers argued in a petition to the Supreme Court last year (PDF) that contrary to the program’s framework, Medicare drug price negotiations baked into the IRA “do not involve true ‘negotiations.’ “The companies’ only option is to withdraw all drugs from Medicare and Medicaid, denying patients across the country access to critical medicines and locking out nearly half of the U.S. prescription drug market.”
The U.S. Chamber of Commerce supported a similar position in January when it asked the Supreme Court to review Novo Nordisk’s IRA lawsuit, which was also denied review on Monday.
At the time, the Chamber of Commerce called the IRA’s price negotiations “illusory” and argued the framework imposed “significant penalties” forcing manufacturers to lower the cost of medicines.
According to the IRA’s language, companies that do not respond to the price negotiation process could face increased excise taxes or choose to withdraw all drugs from Medicare and Medicaid coverage. Pharmaceutical companies could also face civil penalties if they refuse to offer some medicines at the new prices reached during negotiations.
Price negotiations for the first 15 drugs to fall under the IRA’s jurisdiction went into effect at the beginning of the year, and in recent months the Centers for Medicare and Medicaid Services (CMS) also announced prescriptions aimed at reducing costs in 2027 and 2028.
More recently, the second Trump administration introduced its own strategy to curb high prescription drug costs in the United States, in the form of the president’s “most-favored-nation” strategy. It broadly seeks to balance the price of certain U.S. drugs with the lowest price available in certain high-income comparable countries.
Rather than a broader challenge posed by industry to the IRA, many big drug companies struck deals with the Trump administration under the MFN agenda, pledging to lower the cost of certain drugs in Medicaid and pump billions of dollars into things like boosting U.S. manufacturing in exchange for exemptions from the Trump administration’s drug import tariffs.
Regeneron joins 16 other companies, including Pfizer, Novo, Nordisk, Gilead and Roche, and represents the latest major drug company to enter into a drug pricing agreement with the White House.
Editor’s note: This article has been updated to include a statement from Novo Nordisk.
