On April 29th, the district court for the district of New Jersey (J. Quraishi) granted summary judgment for the Government in two cases, brought by BMS and Janssen, challenging the IRA’s Drug Price Negotiation Program. BMS and Janssen alleged that the Drug Price Negotiation Program (i) effects a taking of personal property without just compensation in violation of the Fifth Amendment, (ii) compels speech in violation of the First Amendment, and (iii) unconstitutionally conditions participation in Medicare and Medicaid on the relinquishment of constitutional rights. The district court rejected those claims, holding (i) “there can be no taking when participating in Medicare is voluntary” (which the court noted was in agreement with what the courts in the Chambers of Commerce case and AstraZeneca case have found–see our prior posts here and here), (ii) the Program “regulates conduct, not speech, and Plaintiffs are not engaging in expressive conduct by participating in the Program or by signing the agreements,” which the court found were voluntary actions, and (iii) “the unconstitutional [conditions] doctrine does not apply” because Plaintiffs had not established a constitutional right “in danger of being trampled” by the Program.
BMS appealed the district court’s decision the same day, and Janssen filed a notice of appeal the following day. There are now four cases on appeal (two of which—BMS and Janssen—are consolidated):
- Plaintiffs’ appeal of the W.D. Tex. District Court’s decision granting the government’s motion to dismiss the PhRMA case is pending before the Fifth Circuit Court of Appeals (Case No. 24-50180). Briefing was completed on an expedited schedule, and the appellate court held oral argument on May 1, 2024.
- AstraZeneca’s appeal of the D. Del. District Court’s decision granting the government’s motion for summary judgment is pending before the Third Circuit Court of Appeals. (Case No. 24-1819)
- BMS’s appeal of the D.N.J. District Court’s decision granting the government’s motion for summary judgment is also pending before the Third Circuit Court of Appeals. Janssen’s appeal of the same decision to the Third Circuit has been consolidated with the BMS appeal. (Lead Case No. 24-1820).
Briefing on dispositive motions has completed in the remaining district court challenges to the Drug Price Negotiation Program. The New Jersey district court heard oral argument on the dispositive motions in the Novo Nordisk and Novartis cases on the same day it heard oral argument in the BMS and Janssen cases, but has not yet issued a decision in those cases. The next scheduled oral argument is in the Boehringer Ingelheim case, where the district court for the District of Connecticut (J. Shea) has scheduled oral argument on the parties’ motions for summary judgment for June 20, 2024. For more information about the status of pending IRA litigations, please visit our IRA Litigation Tracker on Goodwin’s IRA Resource Page.
In other IRA news, CMS recently published a new draft guidance on the Drug Price Negotiation Program “for implementation of the Negotiation Program for initial price applicability year 2027 and for manufacturer effectuation of the MFP in 2026 and 2027.” That guidance is available here.