NEW YORK, April 30 ― A US judge yesterday rejected a challenge by Bristol Myers Squibb and Johnson & Johnson to a law requiring them to negotiate the prices of their blockbuster blood clot prevention drugs with the US government's Medicare health insurance programme or pay heavy penalties.
US District Judge Zahid Quraishi in Trenton, New Jersey, became the fourth federal judge to uphold the programme, one of Democratic President Joe Biden's signature initiatives, against drug industry challenges, rejecting their argument that it was an illegal taking of their property.
“In short, defendants are not taking drugs from plaintiffs,” Quraishi wrote, adding that they were free to stop participating in Medicare if they did not want to negotiate.
The drugmakers did not immediately respond to requests for comment, though Bristol Myers has already filed a notice in court that it was appealing the ruling. Drugmakers have argued that it is not feasible to withdraw from Medicare because it represents nearly half the US prescription drug market.
Blood thinners Eliquis from Bristol Myers and J&J's Xarelto were among the 10 drugs chosen last August for the first round of negotiations under the programme, which was part of the 2022 Inflation Reduction Act. Biden and other supporters said the negotiated prices, to go into effect in 2026, will bring down prescription drug costs.
Eliquis brought Bristol Myers about US$8.52 billion (RM40.6 billion) in US sales last year, while J&J recorded US$2.36 billion in Xarelto sales. Eliquis is shared with Pfizer and Xarelto with Bayer, which were not part of the lawsuits.
Quraishi's ruling comes two days before a conservative-leaning panel of the 5th US Circuit Court of Appeals hears an appeal by PhRMA, the leading US drug industry group, seeking to revive its lawsuit challenging the programme after it was dismissed in February.
A Delaware federal judge last month rejected a challenge to the programme by British drugmaker AstraZeneca. An Ohio federal judge in September rebuffed another lawsuit by the US Chamber of Commerce, the nation's largest business lobbying group.
If the price negotiations are allowed to go forward, the first negotiated prices would be set in September, with more drugs added in future years. The programme aims to save US$25 billion in drug costs annually by 2031.
Industry analysts have said that the negotiated discounts could be steep, ranging from the statutory minimum of 25 per cent to as much as 60 per cent. ― Reuters
