Judge Upholds Biden’s Medicare Drug Price Negotiations, Rejecting Challenges from J&J and Bristol Myers Squibb

Johnson & Johnson and Bristol Myers Squibb suffered another legal defeat on Monday as a federal judge dismissed their challenges against President Joe Biden’s Medicare drug-price negotiations policy in New Jersey, ruling that it is constitutional. The decision marks yet another win for the White House amidst an ongoing battle with several pharmaceutical companies over price talks aimed at making costly medications more affordable for seniors under Biden’s Inflation Reduction Act.
The judge’s 26-page opinion rejected arguments from J&J and Bristol Myers Squibb that the negotiations constituted an unconstitutional confiscation of their drugs by the government, as well as a violation of freedom of speech rights. They also argued that the talks were an unconstitutional condition to participate in Medicaid and Medicare programs.
However, Judge Zahid Quraishi stated that participation in price negotiations and Medicare and Medicaid markets was voluntary for drugmakers, with no requirement forcing them “to set aside, keep or otherwise reserve any of their drugs” for government use nor physically transmit medications at a new negotiated price. Therefore, he concluded the talks did not result in a physical taking nor direct appropriation from J&J and Bristol Myers Squibb’s medication supplies.
The pharmaceutical industry has been employing a strategy of seeking split decisions in lower courts scattered across America as part of their legal fight against Medicare drug-price negotiations, but this decision weakens the sector’s stance on the matter by potentially escalating it to the Supreme Court. J&J and Bristol Myers Squibb did not respond immediately when contacted for comment regarding Quraishi’s ruling.
In March of this year, AstraZeneca’s legal challenge was also rejected in Delaware whilst another judge threw out Novartis’ case earlier that same month. Meanwhile, a separate lawsuit brought forward by the Chamber of Commerce faced dismissal back in September for lacking a preliminary injunction.