The Biden administration has been pushing hard for a drug price negotiation program that was passed as part of the Inflation Reduction Act.
Despite some legal challenges that are coming down the line, Neera Tanden, a domestic policy adviser for the White House, said over the weekend that the administration is confident it will hold up in court.
Appearing on the MSNBC program “The Katie Phang Show” on Sunday, Tanden commented:
“There is nothing in the Constitution that stops Medicare from negotiating drug prices. We really … we feel very strongly about our ability to win these lawsuits because this is just a basic principle.”
Last week, the federal government released a list of the initial 10 drugs that would be subject to this price negotiation between pharmaceutical companies and Medicare.
Those include drugs that help treat diabetes such as Jardiance, Januvia, Farxiga and Fiasp; drugs that treat blood clots such as Eliquis and Xarelto; drugs that treat heart failure such as Entresto; drugs that treat rheumatoid arthritis such as Enbrel; drugs that treat blood cancers such as Imbruvica; and drugs that treat psoriasis such as Stelera.
Under the IRA, the makers of these drugs have up to 30 days to agree to participate in the negotiations for a fair market price on these drugs. If they don’t, they will face big excise taxes, or must withdraw their drugs from Medicare coverage.
The IRA also mandates that a specific number of drugs will annually be added to these negotiations.
The pharmaceutical industry fought this aspect of the IRA, and now, multiple lawsuits have been filed by trade associations and drug makers that have challenged the program.
Eight lawsuits have been filed already, with the first one happening in early June.
The latest one was filed on August 25 by AstraZeneca Pharmaceuticals in the Third Circuit U.S. District Court for the District of Delaware. The drugmaker, which is based in the UK, is claiming that the program violates the Administrative Procedures Act since the guidance that implements the program “impermissibly” redefines a “qualifying single source drug” to cover all forms of the dosages and strengths of a drug that’s marketed with the same active ingredient.
The suit is also claiming that the law is unconstitutional, since it violates the due process clause of the Fifth Amendment, since it eschews notice-and-comment rulemaking.
The idea behind the program was to help lower drug costs to patients who have Medicare.
As Tanden commented on the MSNBC program:
“Everybody negotiates prices. What the pharmaceutical companies are doing are they’re going to the courts to ensure that they can charge any price they can get away with, and that is wrong.”
In future iterations of the program, Tanden said she would expect the program will expand so that as many as 20 drugs per year could be added to the negotiations. As she explained:
“It’s really important to remember that for medications that aren’t on this list, they may be on future lists. … Prices have been lowered already for insulin.”