Astellas withdraws lawsuit challenging Medicare drug price program

Biotech
Thursday, September 7th, 2023 7:30 am EDT

Dive Brief:

• Astellas has withdrawn a lawsuit challenging Medicare’s new drug pricing powers, reversing course days after its top-selling cancer therapy Xtandi was not selected as one of 10 drugs that will be included in the first round of price negotiations.
• The drugmaker sued the federal government in July ahead of Medicare announcing the initial list of 10 drugs, which will be subject to lower prices beginning in 2026.
• Contrary to Astellas’ expectations, Xtandi didn’t make the price negotiations’ list, leading the company to file a motion for voluntary dismissal of its suit. “[O]ur decision to withdraw the case does not change our fundamental belief that in its current form, the Medicare Drug Price Negotiation Program … is bad policy and unconstitutional,” the company said in a Sept. 6 statement.

Dive Insight:

Astellas was one of a half dozen large drugmakers to preemptively sue the government over Medicare’s plan to negotiate the prices of select top-selling drugs — authority granted by last year’s Inflation Reduction Act.

Drugmakers have made the case that, in one fashion or another, the program violates the Constitution and unfairly forces drugmakers to accept prices set by the government. Many also argued the law will stifle future investment in drug research and development.

“This program will fundamentally change the pharmaceutical industry in the United States by replacing market-based pricing for innovative, life-saving medicines with prices set by the federal government,” Astellas wrote in its lawsuit, which it filed in U.S. District Court for the Northern District of Illinois.

Astellas built its case around the expectation that Xtandi, a prostate cancer drug it co-markets with Pfizer, would be among the first tranche of drugs selected for price negotiation. Astellas also thought another of its medicines, Myrbetriq, might make Medicare’s list as well.

Neither did. Instead, Medicare chose to first negotiate prices for a slate of drugs sold — independently or in partnership — by Bristol Myers Squibb, Johnson & Johnson, Merck & Co., Boehringer Ingelheim, Eli Lilly, AstraZeneca, AbbVie, Amgen, Novartis and Novo Nordisk.

Bristol Myers, J&J, Merck, Boehringer and AstraZeneca all sued the U.S. government prior to the list’s announcement. Last Friday, Novartis joined them.

Negotiations on the list of 10 drugs will take place over the next year, with the resulting lowered prices announced in September 2024. Those prices will then take effect within Medicare beginning in 2026.

Under the Inflation Reduction Act, Medicare will be able to expand the program by adding new drugs each successive year, provided they have no generic competitors and have been on the market for a certain number of years.

This post has been syndicated from a third-party source. View the original article here.