Novo Nordisk Appeals US Drug Price Challenge to Third Circuit

Novo Nordisk is taking its challenge against the Medicare Drug Price Negotiation Program to the Third Circuit after a federal judge struck down its statutory and constitutional claims.

The Wednesday notice of appeal to the US Court of Appeals for the Third Circuit comes after a federal judge in New Jersey rejected arguments from Novo Nordisk A/S that alleged the Inflation Reduction Act program compels speech, violates separation of powers, and is involuntary.

The appeal was filed a day before the Centers for Medicare & Medicaid Services published the first 10 negotiated drug prices, unveiling $7.5 billion in savings for Americans when prices go into effect in 2026. Novo Nordisk’s NovoLog/Fiasp was selected as one of the drugs.

The drugmaker filed a lawsuit in 2023 against the CMS alleging the agency unlawfully deemed six of its products as a single biologic product and “subjected all of them to price controls, even though the products do not satisfy the statutory criteria.”

Judge Zahid N. Quraishi of the US District Court for the District of New Jersey on July 31 ruled the Inflation Reduction Act includes a provision that expressly precludes “‘administrative or judicial review’” of the selection of drugs. Therefore, the court lacks subject matter jurisdiction to consider challenges to the CMS’s underlying determinations that led to its identification of Novo’s selected drug, he wrote.

Novo Nordisk’s legal arguments say the program forces it to forgo constitutionally protected rights, alleging violations of the First Amendment compelled speech doctrine, Fifth Amendment due process clause, separation of powers doctrine, and the Administrative Procedure Act.

Quraishi, though, ruled against Novo’s constitutional claims.

In appealing to the Third Circuit, Novo joins Johnson & Johnson, Bristol Myers Squibb Co., and AstraZeneca PLC, which have all appealed rejections to their challenges to the drug price negotiation program.

The case is Novo Nordisk Inc. v. Becerra, D.N.J., No. 3:23-cv-20814, notice of appeal filed 8/14/24.