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AstraZeneca Pharmaceuticals LP v. Becerra

Enacted in August 2022, the Inflation Reduction Act (IRA) contains several reforms designed to lower the high cost of prescription drugs and make them more accessible to patients, including seniors enrolled in Medicare. One such reform is the IRA’s drug price negotiation program, which provides a pathway to lower the prices for a particular set of high-cost drugs—so-called single-source drugs, for which no generic equivalent is currently on the market. The program relies on a process in which the Department of Health and Human Services (HHS), which is responsible for implementing Medicare, and the manufacturer of selected drugs negotiate the prices at which drugs will be made available to Medicare providers and drug plans.

AstraZeneca Pharmaceuticals is one of several companies that have filed lawsuits challenging the IRA program. In its case, AstraZeneca alleges, among other things, that the IRA program violates the Due Process Clause. When the company moved for summary judgment, Public Citizen, joined by Patients for Affordable Drugs Now, Doctors for America, Protect Our Care, and Families USA, filed an amicus brief supporting the government’s opposition. The amicus brief explains that high prescription drug prices force many Medicare enrollees, including seniors, to cut back on other necessary expenses or forgo medications that they cannot afford, risking adverse health effects and premature death. In addition, AstraZeneca’s claim is based on the notion that the price negotiated under the IRA program deprives AstraZeneca of its property interests, and that the company’s preferred price is the drug’s “fair market price.” Countering that argument, our amicus brief explains that the drug companies set prices for brand-name prescription drugs under monopolistic conditions, and the sales prices charged are not necessarily fair market prices. Indeed, drug companies charge different amounts to different buyers.

We have also filed amicus briefs in other cases challenging the IRA program: