US District Judge Zahid Quraishi in Trenton, New Jersey, delivered a blow to Bristol Myers Squibb and Johnson & Johnson by rejecting their challenge to a law requiring negotiations of drug prices with the US government’s Medicare program. This marks the fourth federal ruling in favor of the program, a key initiative of President Joe Biden aimed at addressing prescription drug costs, despite arguments from the pharmaceutical industry that it constitutes an unlawful seizure of property.
Judge Quraishi dismissed the drugmakers’ claims, asserting that they have the option to cease participation in Medicare if they disagree with the negotiation requirement. Bristol Myers has already filed an appeal against the ruling, emphasizing the pharmaceutical industry’s contention that withdrawing from Medicare is not a viable option due to its significant share of the US prescription drug market.
The law targets blockbuster blood clot prevention drugs, including Bristol Myers’ Eliquis and Johnson & Johnson’s Xarelto, among others, selected for negotiations under the program initiated as part of the 2022 Inflation Reduction Act. Advocates, including President Biden, anticipate that negotiated drug prices will lead to cost reductions for consumers.
Despite the legal challenges, momentum for the program remains strong, with a conservative-leaning panel of the 5th US Circuit Court of Appeals set to hear an appeal by the Pharmaceutical Research and Manufacturers of America (PhRMA) seeking to revive its lawsuit against the program. Previous challenges by AstraZeneca and the US Chamber of Commerce were rejected by federal judges in Delaware and Ohio, respectively.
The program aims to achieve substantial savings in drug costs, with the first negotiated prices slated to be established in September, followed by additional drugs in subsequent years. Industry analysts anticipate significant discounts ranging from 25% to 60%, potentially leading to substantial cost savings for consumers.
