AstraZeneca Bid to Block Medicare Price Talks Barred, HHS Says

AstraZeneca’s effort to block Medicare negotiations over prescription drug prices can’t be heard before a federal court because the company lacks standing and because the law that created the program “explicitly barred” its claims, the Biden administration said.

"[N]ow that their lobbying has failed, pharmaceutical companies and interest groups have repackaged their policy disagreements into lawsuits, filing complaints around the country challenging the Negotiation Program on a variety of grounds,” President Joe Biden’s Department of Health and Human Services said in its filing.

AstraZeneca PLC‘s case is among those suits, but “fares no better than the others,” the HHS said.

The agency’s remarks come as part of its opposition to AstraZeneca’s motion for summary judgment and in support of its own motion for summary judgment.

AstraZeneca’s case largely rests on claims that the HHS’ implementation of the drug pricing negotiation program violates the Administrative Procedure Act.

Filed in the US District Court for the District of Delaware, the company’s complaint said that Centers for Medicare and Medicaid Services guidance improperly overrode a statutory definition to account for two separate drugs while adding a requirement that renders drugs eligible for negotiation selection despite having generic competition.

The HHS, however, said that had it interpreted things AstraZeneca’s way, there wouldn’t have been any impact on its including the company’s diabetes drug Farxiga for negotiations. The HHS also noted the CMS guidance “governs only the first negotiation cycle,” and that AstraZeneca can’t “show either present or future injury from CMS’s current interpretation,” and that the company thus lacks standing.

Besides standing, the HHS also said the Inflation Reduction Act—the law that created the drug pricing negotiation program—"explicitly barred” AstraZeneca’s APA claims.

The law “expressly states that there ‘shall be no administrative or judicial review’ of certain administrative actions,” the HHS said. “Both the plain text of the IRA and case law analyzing similar bars to judicial review in other parts of the Medicare statute confirm that this Court cannot entertain Plaintiffs’ claims.”

AstraZeneca had also previously told the court that the negotiations violate due process. The HHS, however, said drugmakers voluntarily participate in Medicare, thus AstraZeneca isn’t “being deprived of a protected property interest in a way that implicates the Due Process Clause.”

The HHS urged the court to toss the APA claims and enter a judgment in its favor on due process grounds.

AstraZeneca didn’t immediately respond to a request for comment.

The case is AstraZeneca Pharm. LP v. Becerra, D. Del., No. 1:23-cv-00931, 11/1/23.