NEW YORK – Novartis on Friday became the latest drug company to file a lawsuit against the US government questioning the legality of drug price setting provisions that are going into effect under the Inflation Reduction Act.
The drugmaker filed a lawsuit against the US Centers for Medicare & Medicaid Services in the US District Court for the District of New Jersey. Novartis alleges that allowing CMS to negotiate prescription drug prices is an "unconstitutional taking of private property," an "excessive fine that is wildly disproportionate to the punished conduct," and "an effort to compel misleading speech in violation of the First Amendment."
Novartis' cardiology medication Entresto (sacubitril/valsartan) is one of the drugs named on CMS's list of the first 10 drugs subject to negotiations under the Drug Price Negotiation Program in the Inflation Reduction Act, which President Joe Biden signed into law last year.
Novartis argues that a lower negotiated price will stymie the company's ability to develop new, innovative drugs for conditions like cancer and rare diseases. In fact, Novartis CEO Vas Narasimhan said in May that the firm stopped developing an early-stage cancer drug because of price negotiation risks.
"[Novartis] spends massive sums every year on the research and development processes that are necessary to discover and refine the miracle drugs that save lives and improve the quality of life for patients the world over," the company states in its complaint.
The company's further allegation that price negotiations violate the First Amendment is rooted in Novartis' belief that it is being compelled to say the prices set are the result of negotiations, when in fact no true negotiating has taken place. The drugmaker argues that it's being forced to accept the set price and refer to it as one that was fairly negotiated.
"This program will stifle innovation and jeopardize the creation of future medicines — harming the millions of patients who count on the pharmaceutical industry to discover life-saving treatments," Novartis said in a statement it issued on Friday in tandem with the lawsuit. "The result would fundamentally jeopardize the development and supply of essential, lifesaving drugs for the people who depend on them."
Novartis sells a number of precision oncology products, including the prostate-specific membrane antigen (PSMA)-targeted radioligand therapy Pluvicto (Lu 177 vipivotide tetraxetan), the CDK4/6 inhibitor Kisqali (ribociclib), and the BRAF-MEK inhibitor combination Tafinlar/Mekinist (dabrafenib/trametinib). These products are not on CMS's list of the first 10 drugs for negotiations, but Novartis argues that its ability to develop innovative medicines like these could be affected under the IRA.
Novartis joins a growing list of pharmaceutical companies, trade organizations, and advocacy groups that have legally opposed the Drug Price Negotiation Program. Late last month, AstraZeneca filed a lawsuit, as did Merck in June. Johnson & Johnson, Astellas, Boehringer Ingelheim, Bristol Myers Squibb, the trade organization Pharmaceutical Research and Manufacturers of America (PhRMA), and other groups have done the same.