Appellate Court Rules in Favor of Consumers to Sustain IRA Medicare Price Negotiations
WASHINGTON, D.C. — Today, the Third Circuit, based in Philadelphia, became the first appellate court to uphold the IRA Medicare Drug Price Negotiation program.
The court rejected AstraZeneca’s argument that the program violated its due process rights, explaining that drug companies do not have a constitutionally protected property interest in selling their drugs to a price higher than the government is willing to pay.
Since Congress created the Medicare Drug Price Negotiation Program through the Inflation Reduction Act, which became law in 2022, drug companies have filed lawsuits in courts across the country challenging the constitutionality of the popular program. In the past year, Public Citizen Litigation Group Attorneys Nandan Joshi and Wendy Liu joined by Doctors for America, Protect Our Care and Families USA have filed amicus briefs in these lawsuits explaining 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.
“It’s just common sense that drug companies don’t have a constitutionally protected right to receive exorbitant subsidies forever,” said Nandan M. Joshi, lead attorney for Public Citizen. “Congress did not violate the Constitution by allowing Medicare to negotiate lower drug prices for people on Medicare.”
Additionally, Public Citizen, Patients for Affordable Drugs, Social Security Works and other health groups delivered signatures from 200,000 people to PhRMA, calling on drugmakers to drop their lawsuits against HHS.
Public Citizen Access to Medicines Director Peter Maybarduk said today, consumers win.
“There’s no constitutional right to price gouge Medicare. Fair drug prices won in court today, in an important appeals test of Big Pharma’s long campaign to make the American people pay more,” said Maybarduk. “The court points out something important and obvious, that patents do not give prescription drug corporations the right to sell at a particular price. The government is free to negotiate a better price on behalf of Americans. Everyone knows this. But pharma is having a hard time accepting it. Drug corporations need to drop their lawsuits, stop wasting time and sit down to negotiate fair prices.”
In its first round of negotiations, the Center for Medicare & Medicaid Services (CMS) lowered prices on drugs that treat common and debilitating conditions like diabetes, Crohn’s disease, arthritis, blood clots and more. These lower prices will create an estimated $6 billion in savings for Medicare and ensure lower health care costs for millions of Americans when they take effect in 2026.