In a recent legal battle, Johnson & Johnson and Bristol Myers Squibb faced a setback in their challenge to the Biden administration’s Medicare drug price negotiations. A federal judge in New Jersey rejected their legal arguments, ruling that the program is constitutional. The decision is a significant win for the Biden administration in its efforts to make costly medications more affordable for seniors through Medicare drug price negotiations.
The ruling not only strengthens the administration’s position in the ongoing legal dispute with drugmakers but also undermines the pharmaceutical industry‘s strategy of seeking split decisions in lower courts across the United States. This could potentially escalate the issue to the Supreme Court in the future. The final negotiated prices for the first round of drugs subject to the talks, including products from J&J and Bristol Myers, will come into effect in 2026.
In their lawsuits, J&J and Bristol Myers contended that the negotiations constituted an unconstitutional confiscation of their products by the government and violated their freedom of speech rights. They also argued that participation in the talks was an unconstitutional condition to be part of the Medicaid and Medicare programs. However, Judge Zahid Quraishi emphasized in his opinion that participation in the negotiations and the Medicare and Medicaid markets is voluntary. He stated that drugmakers are not required to reserve or set aside any of their products for the government or Medicare beneficiaries.
Quraishi pointed out that the negotiations do not compel manufacturers to transmit or transport drugs at a new negotiated price. While selling to Medicare may be less profitable under the program, the decision to participate remains voluntary. The judge concluded that the program does not result in a physical taking or direct appropriation of medications from J&J and Bristol Myers Squibb.
Following the ruling, J&J and Bristol Myers Squibb did not immediately provide comments on the decision. However, the legal challenges and debates surrounding Medicare drug price negotiations have been ongoing, with other pharmaceutical companies like Novo Nordisk, Novartis, and AstraZeneca also presenting their arguments in separate lawsuits. Despite some setbacks in lower courts, the industry’s stance on the issue remains firm.
The rejection of J&J and Bristol Myers Squibb’s legal challenges to the Biden administration’s Medicare drug price negotiations by the federal judge underscores the complex legal landscape surrounding healthcare policies and pharmaceutical regulations. While the ruling may have immediate implications for drugmakers, the broader impact on healthcare access and affordability for seniors remains to be seen as the legal battles continue to unfold in different jurisdictions across the country.