May 8 (Reuters) - A federal appeals court on Thursday

shut down AstraZeneca's ( AZN ) challenge to the U.S. government's

program that gives the Medicare health insurance plan the power

to negotiate lower drug prices.

The 3rd U.S. Circuit Court of Appeals upheld a lower court's

ruling dismissing the British drugmaker's challenge to the

program, which was part of former President Joe Biden's

signature Inflation Reduction Act.

The court said AstraZeneca ( AZN ) hadn't shown how it had suffered

a specific injury related to the program or that the company's

due process rights were violated.

The program, a first of its kind in the U.S., requires

pharmaceutical companies to negotiate drug prices with the

government's Medicare health insurance plan that covers 66

million people. AstraZeneca ( AZN ) makes diabetes drug Farxiga, which

is among the drugs chosen for price negotiation, according to

the Centers for Medicare and Medicaid Services.

While AstraZeneca ( AZN ) had said the price negotiations would

impact its ability to make research and development decisions,

it failed to give an example of how that impact had

materialized, the court said.

As to its due process argument, the court said there was no

protected property interest in selling medication to Medicare

members at a price higher than what the government is willing to

pay.

Representatives for AstraZeneca ( AZN ) did not immediately respond

to a request for comment, nor did spokespeople for the U.S.

Department of Health and Human Services, which oversees the

Centers for Medicare and Medicaid Services.

AstraZeneca ( AZN ) filed its lawsuit against the program in 2023,

according to court records. The lawsuit is one of several

challenges to the program, including those brought by leading

industry group PhRMA and drugmakers Johnson & Johnson ( JNJ ),

Merck & Co ( MRK ), Bristol Myers Squibb ( BMY ), and

privately-held Boehringer Ingelheim.

The negotiations process has proceeded, with the initial

round of drug prices set to take effect next year.

In September, the 5th U.S. Circuit Court of Appeals in New

Orleans revived PhRMA and other industry groups' challenge to

the program. Like the 3rd Circuit's ruling, the opinion in the

PhRMA case did not touch on the merits of the law. The 5th

Circuit ruled that a lower court was wrong to dismiss the case

over jurisdictional issues.