In a recent legal development, a U.S. federal court judge has rejected the legal challenges brought by pharmaceutical giants Johnson & Johnson (J&J; NYSE: JNJ) and Bristol-Myers Squibb (BMS; NYSE: BMY) against the drug-price negotiations outlined in President Joe Biden’s Inflation Reduction Act (IRA). The companies had filed separate lawsuits claiming that the negotiations would result in an unconstitutional confiscation of their products by the government, infringing upon their freedom of speech rights and arguing that the conditions for participation in Medicaid and Medicare programs were unconstitutional.
New Jersey Judge Zahid Quairishi dismissed these claims, stating that participation in Medicare and Medicaid is voluntary for pharmaceutical companies, and the negotiations do not mandate otherwise. He further clarified that the government is not forcing companies to participate in these programs, and the negotiations aim to ensure drugs sold through these schemes are offered at a lower cost.
The Inflation Reduction Act mandates drug price negotiations to commence from 2026, with J&J and BMS each having one drug in the negotiation pool. Other pharmaceutical companies, including Novo Nordisk, AstraZeneca, and Novartis, have also challenged the legality of these price negotiations. In March 2024, judges in Delaware and Texas dismissed similar lawsuits, one of which was filed by AstraZeneca.- Flcube.com
