Novartis Urges Court to Hand It Quick Win in Drug Price Battle

Medicare’s drug price negotiation program violates the Constitution and must be struck down, Novartis Pharmaceuticals said in a motion for summary judgment against the US government.

Novartis urged the US District Court for the District of New Jersey to declare the Centers for Medicare & Medicaid Services’ price-setting provisions unconstitutional and to enjoin the government from enforcing it against the company.

“It recklessly gambles with public health and violates core tenets of our constitutional order, for no purpose other than to advance the government’s preferred narrative and then shield the government from any resulting political accountability for its decisions. It must be struck down,” the company wrote in its Nov. 22 motion.

The drugmaker’s heart failure drug Entresto was one of the 10 drugs selected in the first round of Medicare’s price negotiations. The request for summary judgment follows the company’s complaint against the CMS in September.

The drugmaker argues the program violates the First, Fifth, and Eighth Amendments.

“All of this amounts to a forced sales regime that is unique in American history. Never before has the government compelled private companies to hand over their products at a price and quantity of the government’s demand,” the company wrote.

Novartis’ lawsuit is one of nine against the Biden administration’s program created under the 2022 Inflation Reduction Act. Drugmakers like Novo Nordisk and AstraZeneca PLC also argue the program is unconstitutional and challenge its implementation.

All manufacturers in the first negotiation round entered agreements with Medicare in October.

“Novartis will continue engaging in the ‘negotiation’ process only because the excise tax would be devastating,” the company wrote.

Companies can face an excise tax if they refuse to participate in the negotiations or comply with the maximum fair price ultimately set by Medicare. The penalty starts at 65% of the US sales of a product, with fines increasing by 10% every quarter, with a maximum of 95%.

The case is Novartis Pharm. Corp. v. Becerra, N.J. Dist. Ct., No. 3:23-cv-14221, motion for summary judgment 11/22/23.