Novo Nordisk Loses Bid to Revive Suit Over Drug Price Talks (1)

A federal appeals court dealt a blow Monday to Novo Nordisk A/S when it ruled the US government lawfully selected its insulins for a program that allows the Medicare agency to negotiate their drug prices.

The Centers for Medicare & Medicaid Services correctly followed federal statute when it grouped together Novo’s insulin products to be subject to federal price negotiations, Judge Thomas Hardiman wrote for the US Court of Appeals for the Third Circuit.

The court supported the decision pointing to its other rulings that struck down similar cases filed by Johnson & Johnson, Bristol Myers Squibb Co., and Novartis AG.

Novo challenged the CMS in 2023 alleging the agency unlawfully deemed six of its products as a single biologic product and subjected all of them to price controls under the government’s Medicare Drug Price Negotiation Program.

The plan, created under President Joe Biden’s signature Inflation Reduction Act, empowers the government to engage in talks with manufacturers over drug prices covered under Medicare. The negotiated prices for the first round of drugs are set to go into effect Jan. 1, 2026.

Novo alleged the program violated the First Amendment compelled speech doctrine, Fifth Amendment due process clause, separation of powers doctrine, and the Administrative Procedure Act.

A lower court judge in July 2024 struck down the company’s claims and ruled participating in the negotiation program is voluntary.

“We have held that the Act provides an escape hatch for a company that declines to participate in the Program,” Hardiman said in the ruling Monday. The law, Hardiman said, offers “manufacturers a 30-day exit from the Coverage Gap Discount and Manufacturer Discount Programs upon request” to avoid facing an excise tax for failing to comply with the Medicare negotiations.

A Novo spokesperson said in an emailed statement that the company is “disappointed with the decision,” and is “assessing our options to appeal this ruling.”

“Novo Nordisk remains opposed to government price setting through the Inflation Reduction Act and has significant concerns about the law and with how CMS implemented the statute,” the spokesperson said.

Judges Peter Phipps and Arianna Freeman joined the opinion.

The case is Novo Nordisk Inc. v. Secretary US Dept & Health and Human Services, 3d Cir., No. 24-02510, opinion issued 10/6/25.