Johnson & Johnson, a prominent pharmaceutical company, has joined the ranks of drugmakers suing the U.S. government over drug price negotiations in the Inflation Reduction Act (IRA). This move makes J&J the fourth major drugmaker to take legal action, following similar lawsuits by Merck, the U.S. Chamber of Commerce, and industry association PhRMA.
J&J expressed its stance on the matter, stating that the government is compelling the company to provide its innovative and patented medicines at prices significantly below market rates, as mandated by the law. The company argued that such an approach would disrupt the current self-sustaining cycle of pharmaceutical innovation, which ensures patient access to groundbreaking treatments.
Astellas, another pharmaceutical company, filed a similar lawsuit using comparable language. Astellas criticized the drug negotiation program established by the IRA, labeling it as “price setting” and asserting that it infringes upon constitutional rights, including the Takings Clause, Due Process Clause, and First Amendment.
As per the IRA’s current provisions, drug price negotiations will commence in 2026 for medications that impose the highest costs on the government. Moody’s Investors Service reported that Astellas will immediately feel the impact on two of its therapies, Xtandi and Myrbetriq. Johnson & Johnson, on the other hand, is expected to face negotiations concerning Xarelto and the AbbVie-partnered drug, Imbruvica.
Astellas highlighted in its complaint that it will be compelled to sign an agreement on October 1 of this year to participate in the program, which it claims will violate its constitutional rights.
Johnson & Johnson’s complaint emphasized that potential revenue losses from Xarelto resulting from the negotiation program could not be adequately compensated through legal remedies. The company stated that the effects of the program would extend beyond Medicare markets, affecting non-Medicare sectors in equally significant and immeasurable ways.
Last month, when Merck became the first pharmaceutical company to file a lawsuit against the government, Christen Linke Young, the deputy assistant to the president for health and human affairs, responded by stating that there is no constitutional barrier preventing Medicare from engaging in negotiations for lower drug prices.