More than four months after losing a legal attempt to overturn parts of the Inflation Reduction Act’s drug price negotiations, AstraZeneca is firing back in a court appeal, arguing that CMS’ latest guidance contradicts the law.
AstraZeneca’s diabetes drug Farxiga, which sold $1.45 billion in the US last year, is one of the 10 drugs selected by CMS for the first year of price negotiation. And while those negotiations are ongoing, the UK-based pharma filed an appeal in the Third Circuit court on Monday, claiming that the price negotiations are not really voluntary, due to the excessive fines that could be imposed.
The company also calls out CMS’ new guidance for drugmakers, which it says runs counter to the language of the law.
“AstraZeneca cannot fairly value its product without a judicial determination of whether the guidance is unlawful,” the company said.
It claims that under the CMS guidance, the government “could determine at any time” that generic competition may not be adequate enough to keep a brand-name drug from the negotiations “even if CMS had previously decided a generic did meet that test.”
AstraZeneca also raises concerns about CMS and FDA using different interpretations of an active ingredient.
The company points to its cancer drug Calquence, noting that in 2022, the FDA approved a new tablet formulation that contains the same active moiety but which FDA viewed “as different enough to warrant unique [new drug applications].”
Under the IRA, AstraZeneca claims, the Calquence tablets would be exempt from negotiations through 2032, but under CMS’ guidance, “the price cap could apply as early as 2027.”
The appeal says CMS’ guidance is impacting the company’s ability to price and value its products, even if the consequences are not immediate.
The appeal follows a decision in federal court in March that said AstraZeneca’s constitutional challenge against the IRA should not move forward because the price negotiations are voluntary. Bristol Myers Squibb and J&J also filed appeals in May.
The negotiation period between CMS and drugmakers will officially end on Aug. 1, and on Sept. 1, CMS will publish maximum fair prices for Farxiga and the other nine drugs selected for negotiation. Those prices go into effect in 2026.