Novartis Pharmaceuticals Corp. v. Becerra

The Inflation Reduction Act (IRA) of 2022 contains several reforms designed to lower the high cost of prescription drugs and make them more accessible to patients, including seniors enrolled in Medicare. One such reform is the IRA’s drug price negotiation program, which provides a pathway to lower the prices for a particular set of high-cost drugs—so-called single-source drugs, for which no generic equivalent is currently on the market. The program relies on a process in which the Department of Health and Human Services (HHS), which is responsible for implementing Medicare, and the manufacturer of selected drugs negotiate the prices at which drugs will be made available to Medicare providers and drug plans.

Drug companies have filed lawsuits in courts across the country challenging the IRA program under various theories, including theories under the Constitution’s Takings Clause and Due Process Clause. In each case, Public Citizen, joined by Patients for Affordable Drugs Now, Doctors for America, Protect Our Care, and Families USA, filed an amicus brief in support of the government. Our amicus briefs explain that high prescription drug prices force many Medicare enrollees, including seniors, to cut back on other necessary expenses or forgo medications that they cannot afford, risking adverse health effects and premature death. In addition, because the companies’ theories are based on the faulty premises that drug companies are obligated to participate in Medicare and that the price they prefer to charge Medicare patients is the “market” price from which any reduction in price under the program must be evaluated, our briefs also explain how drug pricing operates in the U.S.

The cases include:

• Dayton Area Chamber of Commerce v. Becerra (S.D. Ohio) – Read our district court briefs here and here.

On August 8, 2024, the district court dismissed the case on jurisdictional grounds and did not reach the merits of the constitutional arguments.

• Merck & Co. v. Becerra (D.D.C.) – Read our district court brief here.
• Bristol Myers Squibb Co. v. Becerra (D.N.J., 3d Cir.) – Read our district court brief here and our appellate brief here.

On April 29, 2024, the district court granted the agency’s motion for summary judgment and denied the company’s motion. The court held that the program does not effect a taking, does not compel speech, and does not impose an “unconstitutional condition” on the company. The company then appealed to the Third Circuit.

• Janssen Pharmaceuticals v. Becerra (D.N.J., 3d. Cir.) – Read our district court brief here and our appellate brief here.

On April 29, 2024, the district court granted the agency’s motion for summary judgment and denied the company’s motion. The court held that the program does not effect a taking, does not compel speech, and does not impose an “unconstitutional condition” on the company. The company then appealed to the Third Circuit.

• AstraZeneca Pharmaceuticals v. Becerra (D. Del.) – Read our district court brief here.

On March 1, 2024, the district court dismissed the case. On the due process issue addressed in our brief, the court held that the company’s claim lacked merit because drug manufacturers do not have a property interest in selling drugs at a price that the government is not willing to pay, and because the IRA program is voluntary, not coercive. The company then appealed to the Third Circuit.

• Boehringer Ingelheim Pharmaceuticals v. HHS (D. Conn.) – Read our district court brief here.

On July 3, 2024, the district court, rejecting each of the company’s constitutional and statutory claims, granted summary judgment in favor of the agency.

• Novartis Pharmaceuticals Corp. v. Becerra (D.N.J.) – Read our district court brief here.

On October 18, 2024, the district court, rejecting each of the company’s claims, granted summary judgment in favor of the agency.

• Novo Nordisk v. Becerra (D.N.J.) – Read our district court brief here.

On July 31, 2024, the district court granted summary judgment in favor of the agency. The court held that it lacked subject matter jurisdiction over the plaintiffs’ statutory challenges, and it rejected all of the plaintiffs’ constitutional challenges to the IRA program.