Johnson & Johnson and Astellas add to the growing number of lawsuits filed against the US Inflation Reduction Act’s drug price negotiation provisions

Lawsuits from Johnson & Johnson and Astellas that challenge the ‘unconstitutional’ Medicare Drug Price Negotiation Program are the latest in a series of legal fights against the US government and join others filed in recent weeks by Bristol Myers Squibb, Merck, PhRMA and the US Chamber of Commerce. 

In the past few days, two new lawsuits have been filed in the US federal court seeking to block the controversial price-setting policies created by the Centers for Medicare and Medicaid Services (CMS) under the mandate of the Inflation Reduction Act (IRA). Legal action has been instigated by Johnson & Johnson and Astellas, citing the IRA violates the First and Fifth Amendments to the US Constitution. The lawsuits come as both companies are expected to see two of their top-selling drugs subject to CMS’ drug price negotiations in 2026.  

In a statement released by Astellas on July 14, 2023, the company explained they had supported some aspects of the IRA, such as the annual out-of-pocket cap in Medicare Part D, but feel the price-setting policies may be a step too far. They ‘recognize the crucial need to holistically improve affordability and access for patients’ yet see that these pricing policies will only ‘discourage private-sector investment in the discovery and development’ that will ‘disincentivize critical R&D efforts to tackle hard-to-treat diseases and diminish the availability of new medicines for patients.’ Astellas’ antiandrogen prostate cancer drug Xtandi (enzalutamide), which accounted for almost $2 billion in Medicare part D spending in 2020, is predicted to be one of the 10 drugs eligible for negotiation in 2026.  

Johnson & Johnson also see one of their anticoagulant rivaroxaban (Xarelto) on CMS’ negotiation list for 2026. In their lawsuit, filed on July 18, 2023, in federal district court in New Jersey, the company argues that the IRA gives the government too much power to dictate drug prices, stating ‘there is no genuine agreement, no real negotiation, and nothing fair about the price the Government unilaterally dictates.’ The company also claims the IRA interferes with their right to free speech and takes away the company’s property without due process of law. 

Like all other lawsuits filed recently, both legal actions are still in their early stages. It is not yet clear how the CMS will respond or whether other companies with drugs on CMS’ negotiation list for 2026 will follow with legal challenges.