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Court upholds Medicare's drug price negotiation power

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Novo Nordisk's constitutional challenges rejected by 3rd

Circuit

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Multiple drugmakers' lawsuits against Medicare program

have

failed in appellate courts

By Diana Novak Jones

CHICAGO, Oct 6 (Reuters) - A federal appeals court on

Monday rejected Novo Nordisk's challenge to the U.S.

government's program that gives its Medicare health insurance

plan the power to negotiate lower drug prices, the latest in a

barrage of lawsuits brought by drugmakers to fail.

The Philadelphia-based 3rd U.S. Circuit Court of Appeals

affirmed a lower court's ruling dismissing the Danish

drugmaker's challenge to the program and the Centers for

Medicare and Medicaid Services' selection of six of its insulin

products for price negotiations.

A unanimous three-judge panel rejected Novo's constitutional

challenges to the program, which was part of Democratic former

President Joe Biden's Inflation Reduction Act, and said the law

specifically bars courts from reviewing the drugs selected.

A Novo Nordisk spokesperson said the company was assessing

its options to appeal the ruling.

A spokesperson for the White House did not immediately

respond to a request for comment.

President Donald Trump has put pressure on drugmakers to lower

their prices in recent months, as Americans pay more for

pharmaceuticals than any other nation.

The Inflation Reduction Act requires pharmaceutical

companies to negotiate drug prices with Medicare, which covers

66 million people. The negotiations got under way despite the

drugmakers' lawsuits, with the initial round of drug prices set

to take effect next year.

Novo is among several pharmaceutical companies to

challenge the program, claiming it violated its constitutional

rights to due process and free speech. Nearly all have failed.

In May, the 3rd Circuit upheld a lower court's ruling

dismissing AstraZeneca's ( AZN ) challenge, saying the company

had no protected constitutional right to sell its drugs to the

government at a price higher than what it wants to pay. In

September, the court ruled similarly in challenges brought by

Bristol Myers Squibb ( BMY ) and Novartis, court

records show.

Monday's ruling, authored by Circuit Judge Thomas Hardiman,

an appointee of Republican President George W. Bush, pointed to

the court's earlier precedents to reject Novo's constitutional

challenges.

Hardiman was joined on the panel by Circuit judges Peter

Phipps, who was appointed by Trump, and Arianna Freeman, a Biden

appointee.

The case is Novo Nordisk v. HHS et al, case number 24-2510

in the 3rd U.S. Circuit Court of Appeals.

For Novo Nordisk: Ashley Parrish of King & Spalding

For HHS: Lindsey Powell of the U.S. Department of Justice