Novartis has lost its legal challenge against the Inflation Reduction Act on Friday, making it the sixth drugmaker rejected in federal court.
New Jersey Judge Zahid Quraishi on Friday granted a summary judgment in favor of the federal government, ruling Novartis’ arguments were “nearly identical” to three other cases that have already been thrown out. Quraishi previously rejected challenges brought by Bristol Myers Squibb, Novo Nordisk and Johnson & Johnson.
The federal government has won several similar lawsuits brought in other states by Boehringer Ingelheim, AstraZeneca, and a handful of other organizations including the industry’s DC-based lobbying group PhRMA.
Novartis told Endpoints News Friday that it plans to appeal the decision, reaffirming its stance that the “drug price-setting provisions in the IRA are unconstitutional and will have long-lasting negative consequences for patients.” Other drugmakers are likewise racing to appeal the decisions before negotiated prices under the IRA take effect in 2026.
The new prices were unveiled in August and represent a substantial discount from participating drugs’ list prices, including Novartis’ Entresto which saw a 53% list price reduction. However, it’s unclear how much lower they are than confidential net prices, which include discounts and rebates.
Despite being the first to file a lawsuit, Merck is the last drugmaker awaiting a federal district court decision. The company urged a Washington, DC, court for a timely decision in July, so it can appeal if necessary before 2026.
In Thursday’s ruling, Judge Quraishi rejected Novartis’ First and Fifth Amendment challenges, saying that the court hadn’t changed its mind that drugmaker’s participation in negotiations is voluntary, and that the law doesn’t amount to a physical taking of property or a violation of free speech.