Novo Nordisk has become the latest player in the biopharmaceutical industry to challenge the drug price negotiation provisions outlined in the Inflation Reduction Act (IRA). In a significant move, Novo Nordisk filed a lawsuit in a federal district court in New Jersey, asserting that the IRA program infringes upon the First Amendment and the Fifth Amendment.
Novo Nordisk’s portfolio of insulin treatments for diabetes, which includes NovoLog and Fiasp, falls within the ambit of 10 drugs slated for Centers for Medicare & Medicaid Services (CMS) price negotiations set to begin in 2026. Notably, these insulin products accounted for a substantial $2.6 billion in Medicare Part D expenditures from June 2022 to May 2023, according to CMS data.
Despite initiating the lawsuit, Novo Nordisk later announced its intention to meet the October 1st deadline for participating in the negotiation process, emphasizing its commitment to compliance with the law, albeit with reservations.
“While we do not believe the implementation of drug price negotiation provisions of the IRA is the right approach to help ensure patients living with diabetes can afford our insulin, we will comply with the law,”a spokesperson for the company conveyed.
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Meanwhile, on the same Friday, a federal judge in Ohio rejected a motion by the US Chamber of Commerce to block the commencement of the price negotiation program. However, the court has yet to make a final determination on the Chamber’s argument regarding the program’s constitutionality.
Novo Nordisk’s lawsuit centres on its assertion that the CMS has wrongly categorised six of its insulin treatments as a single biologic product subject to “price controls.” Novo Nordisk emphasised the uniqueness of each of these medications, citing their distinct formulations and FDA approvals, which were granted individually.
Notably, several other companies with drugs included in the CMS negotiation list have also filed lawsuits challenging the provisions, including AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Johnson & Johnson, Novartis, and Merck.
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Nevertheless, several of these companies have expressed their willingness to participate in the negotiation process. For instance, Johnson & Johnson stated on Monday that it had submitted all the requisite information in alignment with CMS’s drug pricing guidance and intends to continue demonstrating the value of its treatments to patients. AstraZeneca, Bristol Myers Squibb, and Merck are among the companies that have also agreed to partake in the program.
Furthermore, in addition to enrolling in the price negotiation program, these companies are mandated to provide data on Monday to assist CMS in determining equitable pricing. Companies that opt out of the program are obliged to permit generic or biosimilar competition, in accordance with CMS guidelines.