Novartis sues US government over Medicare drug price regulation

By Patrick Wingrove

(Reuters) – Swiss drugmaker Novartis (SIX:) on Friday said it had sued the U.S. government in an attempt to halt the Medicare drug-price negotiation program, which includes its top-selling heart-failure medicine Entresto.

The lawsuit, filed in federal court in New Jersey, is the first since the Biden administration on Tuesday released its list of 10 prescription medicines that will be subject to price negotiations by the Medicare health program, which covers 66 million people.

Other drugs selected were Bristol Myers (NYSE:) Squibb and Pfizer’s blood thinner Eliquis, Merck’s diabetes drug Januvia, and Eliquis rival Xarelto from Johnson & Johnson (NYSE:).

The Inflation Reduction Act, signed into law by President Joe Biden last year, allows Medicare to negotiate prices for some of its most costly drugs. The pharmaceutical industry says the program will curtail profits and compel it to pull back on developing new treatments.

Six other drugmakers, including Bristol Myers Squibb, J&J and Merck, had already sued the Centers for Medicare and Medicaid Services, which runs Medicare, before the drug list was announced in an effort to derail the price-setting process.

Novartis said in a written statement that the negotiations were unconstitutional because they amounted to a taking of private property and imposed excessive fines on manufacturers that refused to participate in the talks or accept the prices Medicare reached.

The other drugmakers made similar arguments in their lawsuits.