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When AstraZeneca joined five of its peer drugmakers in suing the U.S. government on Friday, the pharmaceutical industry’s defense of its counterattack against Medicare’s new drug pricing authority grew.
The British corporation alleges in a 44-page lawsuit that Medicare is improperly carrying out provisions of last year’s Inflation Reduction Act, which for the first time allowed the agency the ability to negotiate costs of some of the most popular pharmaceuticals.
AstraZeneca also asserts that the law’s provisions governing medication pricing are unconstitutional, a claim that has previously been made in various ways in lawsuits by Merck & Co., Bristol-Myers Squibb, Johnson & Johnson, Astellas, and Boehringer Ingelheim.
The “single source” or absence of generic competitors law, sometimes known as the “IRA,” requires Medicare to identify the pharmaceuticals that account for the majority of its expenditures that are either nine or 13 years distant from U.S. approval.
The agency then has the authority to bargain for a cheaper price, starting with 10 medications in 2026 and then extending to more every year after.
A week before the Biden administration is scheduled to release its selection of the 10 medications that will initially be subject to negotiated rates in 2026, the firm files suit. Some believe that Symbicort, an asthma medication manufactured by AstraZeneca, will most likely be included.
Similar to the concerns made by Astellas, J&J, and Boehringer, AstraZeneca contends that the IRA’s drug pricing provisions infringe upon the right to due process guaranteed by the Fifth Amendment.
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Drug Pricing Dispute
The majority of the company’s argument, however, is on Medicare’s alleged violations of the IRA through its interpretation of the statute in earlier this year’s regulatory guidelines.
AstraZeneca claims that Medicare illegally interpreted the definition of a “single source” medicine under the IRA to include all doses and formulations containing a particular active therapeutic component.
For instance, the Food and Drug Administration would regard the capsule and tablet forms of a drug ingredient to be the same product and thus both would be available for price negotiation at the same time.
This may apply to more recent versions of AstraZeneca’s cancer medications Lynparza and Calquence, the company said.
More generally, AstraZeneca contends that the IRA nullifies the Orphan Drug Act, which created incentives for pharmaceutical companies to create cures for rare ailments. This regulation has proven to be a potent catalyst, driving billions of dollars in pharmaceutical company research into novel treatments for rare diseases.
Only approved orphan medications that have been given approval for a single purpose are excluded from negotiation under the IRA. Drug companies typically create orphan medications for a number of distinct but connected disorders.
Given that Alexion Pharmaceuticals, a manufacturer of medications for rare diseases, cost AstraZeneca $39 billion in 2020, the issue is especially important to them.
AstraZeneca is requesting that the court rule that the IRA and the Medicare IRA guidance documents are illegal and unconstitutional. In order to make a choice more quickly, it wants a rushed briefing.
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Source: Biopharma Dive
