A New Jersey federal judge on Monday tossed cases brought by Johnson & Johnson and Bristol Myers Squibb against the Inflation Reduction Act, another victory for the law while Medicare works through the first year of price negotiations with industry.
In a summary judgment, Judge Zahid Quraishi ruled the IRA provisions don’t constitute a physical taking of property or a violation of speech, the two constitutional claims at the core of the drugmakers’ arguments. The opinion could impact similar cases playing out in other courts across the country.
“In short, Defendants are not taking drugs from Plaintiffs. BMS and Janssen want to sell their drugs to Medicare, a significant (but not the sole) buyer of pharmaceuticals in the United States,” Quraishi wrote in an opinion. “Selling to Medicare may be less profitable than it was before the institution of the Program, but that does not make Defendants’ decision to participate any less voluntary.”
Bristol Myers has already filed to appeal the decision in the Third Circuit.
The judge’s orders follow a joint hearing last month, in which Quraishi appeared skeptical of the companies’ stance that the government is “ransoming” their drug sales by imposing heavy penalties for not participating in negotiations. Quraishi also heard arguments from Novartis and Novo Nordisk. Novartis told Endpoints News it has not been notified of a decision in its case. Novo Nordisk did not immediately respond to a request for comment.
The ruling is the latest big win for the federal government, following the rejection of two cases that were brought by AstraZeneca and a handful of organizations, including industry trade group PhRMA earlier this year. AstraZeneca has filed an appeal.
Separate cases brought by Merck and Boehringer Ingelheim make similar arguments that negotiations violate the Fifth Amendment’s takings clause and the First Amendment’s freedom of speech.
“Contrary to Plaintiffs’ interpretation, the Program regulates conduct, not speech. Any effect on Plaintiffs’ speech in this case is merely incidental,” Quraishi wrote on Monday.
Bristol Myers and J&J didn’t immediately respond to requests for comment.
Earlier this month, President Joe Biden touted the IRA as a win against “big pharma” during remarks at the White House, and argued in favor of expanding negotiations to include “at least 50 drugs a year.” CMS selected 10 drugs for the first round of negotiations, which will go into effect in 2026.
Editor’s Note: This story has been updated to include comment from Novartis.