Big US drug companies stage legal battle against Biden's plan to reduce cost of certain medicines.

In a flurry of lawsuits, these drugmakers have blasted the government initiative as unconstitutional, defended their pricing practices and warned that regulation could undermine future cures — even as millions of older Americans say they are struggling to afford essential treatments.

What to know about the Biden administration’s drug price negotiations

The legal wrangling appears primed to reach the Supreme Court, which could carry lasting implications for the government’s ability to regulate health-care prices broadly. The stakes are also enormous for Biden, who ran in 2020 on a pledge to fulfill a longtime promise — made by both parties — to ease a key financial strain on older Americans.

The pharmaceutical industry specifically seeks to block a new law that enables Medicare to negotiate the price of select drugs under its prescription benefit, known as Part D. The idea is modeled after similar systems internationally, which have helped lower costs in other countries even as Americans face sky-high prices for some of the same treatments.

Enacted in 2022 as part of Biden’s signature economic package, the Inflation Reduction Act, the law requires the administration to identify an initial set of 10 drugs to negotiate. The list was unveiled in August and includes the blood-thinner Eliquis, the heart-failure medication Farxiga and the diabetes pill Jardiance.

While manufacturers have since engaged in price discussions with the administration, they have also unleashed a blitz of legal challenges meant to upend the entire system. The intensity of their opposition was on display Thursday, as four pharmaceutical giants urged a federal judge in New Jersey to terminate the program before seniors would see any change to their drug costs.

Lawyers for Bristol Myers Squibb, Janssen, Novartis and Novo Nordisk offered an array of objections to the program, arguing that it constituted an illegal taking of their drugs, for example, and wrongly carried the threat of steep financial penalties. Some companies also claimed that merely signing a contract would be unconstitutional because it would force them to acknowledge in public that a lower price is a fairer one.

“This program would have a debilitating effect on plaintiffs’ ability to compete and innovate,” said Kevin King, a lawyer for Janssen, which makes Xarelto, an anti-blood-clot medicine, and Stelara, prescribed for psoriatic arthritis. Both are subject to negotiation.

As drugmakers slam Medicare price controls, Wall Street shrugs

Over roughly five hours of arguments, the judge in the case — Zahid Quraishi, a Biden appointee — frequently pressed the industry about its claims, noting at one point that the drug companies seemed to be portraying themselves as “Mother Theresas” that “develop drugs for free.”

The lawyers’ criticisms of the program echoed years of attacks from industry lobbyists, who signaled anew this month that they are committed to preventing the Biden administration from striking agreements to lower prices under Medicare.

“We feel confident that ultimately justice will prevail here, and we’ll keep pushing along,” said James Stansel, the general counsel of PhRMA, the industry’s leading lobbying group.

The legal campaign offers the most immediate test for one of Biden’s prized legislative accomplishments, which relaxed a longtime prohibition against Medicare negotiating drug costs directly with manufacturers. Hours after court arguments concluded in Trenton, the president called on Congress to preserve and expand the very program that pharmaceutical giants are trying to unwind.

...