Federal Court Dismisses Novartis’ Challenge to Inflation Reduction Act, Marking Sixth Win for Government

Novartis' Lawsuit Dismissed:
A New Jersey federal judge has dismissed Novartis' lawsuit against the Inflation Reduction Act (IRA), specifically challenging the Medicare Drug Price Negotiation Program.

Government's Streak Continues:
This decision marks the sixth time a drugmaker's legal challenge to the IRA has been rejected in federal court, following similar dismissals of lawsuits by Johnson & Johnson, Bristol Myers Squibb, AstraZeneca, and Boehringer Ingelheim.

Voluntary Participation:
The courts have consistently ruled that participation in the Medicare program is voluntary, and thus, drug manufacturers cannot claim constitutional infringements such as violations of the Fifth Amendment's Takings Clause or the First Amendment.

Legal Grounds:
The New Jersey court, like others, found that the manufacturers' arguments about forced participation and unconstitutional conditions were not valid, as the government's use of its market share to negotiate prices does not infringe on the manufacturers' rights.

Recent Rulings:
The latest ruling in favor of the government was made by New Jersey Judge Zahid Quraishi on October 18, 2024, further solidifying the legal standing of the IRA's drug price negotiation provisions.