A federal appeals court unanimously rejected a Novo Nordisk challenge to Medicare’s drug price negotiation program, a ruling that will allow the government to lump together products with the same ingredient for the purpose of choosing drugs for negotiation.
The drug industry has been on a losing streak on this issue, at least in the courtroom. Judges have ruled against pharmaceutical companies at least 15 times since the law governing negotiations went into effect in 2023, according to Patients for Affordable Drugs, which supports letting Medicare negotiate lower drug prices. In its cases, the industry has alleged that the program runs afoul of First Amendment speech protections, the Fifth Amendment requirement that the government follow a fair process before taking property or other rights, and the Eighth Amendment’s prohibition on “excessive” government fines.
Novo Nordisk’s lawsuit included an unusual challenge to the way Medicare chooses drugs for negotiation. Medicare was allowed to pick 10 drugs for negotiation in its first year, and is now negotiating prices for an additional 15 drugs. By the fourth year, 20 new drugs will be chosen, and that will remain the maximum number of new drugs subject to negotiation each year.
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