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A federal judge in New Jersey on Monday dismissed the Johnson & Johnson‘sand Bristol-Myers SquibbLegal challenges to Biden administration Medical insurance drug price negotiationruled that the plan was constitutional.
The decision is another victory The White House is locked in a fierce legal battle with several drugmakers over price negotiations.The ruling also undermines the pharmaceutical industry’s pursuit of strategies split decision making Lower courts are scattered across the United States, which could escalate the issue to the Supreme Court.
Medicare drug price negotiations are a key policy component of President Joe Biden’s Inflation Reduction Act, which aims to make expensive drugs more affordable for seniors. Doing so could reduce drugmakers’ profits. Final negotiated prices for drugs from the first round of negotiations, which include drugs from J&J and Bristol Myers, will take effect in 2026.
A Johnson & Johnson spokesperson said in a statement to CNBC that it plans to appeal the decision.
They added: “This is a disappointing ruling for patients and America’s leadership in medical innovation.”
Bristol-Myers Squibb did not immediately respond to a request for comment on the ruling.
In separate lawsuits, the drug companies argued that the negotiations were an unconstitutional government seizure of their drugs that violated their free speech rights. They also argue that negotiations are an unconstitutional condition of participation in the Medicaid and Medicare programs.
But New Jersey District Judge Zahid Quraishi wrote in a 26-page opinion that participation in price negotiations and the Medicare and Medicaid marketplaces is voluntary.
He wrote that the negotiations do not require drug companies to “hold, withhold or otherwise withhold any drugs” for use by the government or Medicare beneficiaries. Quraishi added that the negotiations would not force manufacturers to actually ship or ship drugs at the new negotiated prices.
“Profits from selling to Medicare may be lower than before the program was implemented, but that does not mean (J&J and Bristol-Myers Squibb’s) participation in the program is any less voluntary,” Quraishi wrote. “For the reasons provided , the court concluded that the scheme did not result in actual acquisition or direct appropriation of the drugs from either drugmaker.
Johnson & Johnson, Bristol-Myers Squibb, Novo Nordisk and Novartis presented oral arguments to Quraishi at the same hearing in March.
That same month, a federal judge in Delaware dismissed a separate lawsuit by AstraZeneca challenging the negotiations.In Texas, third federal judge throw away Another lawsuit in February.
A federal judge in Ohio also ruled in September that the preliminary injunction The case, sought by the Chamber of Commerce, one of the country’s largest lobby groups, aims to block price negotiations before October 1.
