Astellas withdraws IRA lawsuit

Sept. 7, 2023

Earlier this week, Astellas requested the dismissal of its lawsuit challenging provisions within the Inflation Reduction Act (IRA). 

Astellas first took legal action against certain provisions of the IRA back in July, citing concerns over the constitutionality of the Centers for Medicare and Medicaid Services' (CMS) Drug Price Negotiation Program.

The program, aimed at fostering negotiation, enforces government-fixed prices for Medicare prescription drugs. At the time, Astellas argued that this could disrupt the competitive U.S. drug market and deter private-sector investments in researching and developing new medicines, particularly for complex diseases.

But after the CMS announced the first 10 drugs chosen for Medicare price negotiation, and Astellas’ drugs were not included, the pharma company dropped its suit. Despite withdrawing its lawsuit, Astellas reiterated its belief that the current program under the IRA is flawed and may pose constitutional issues.

Other companies have echoed Astellas' frustration with the program. Back in June, Merck became the first pharmaceutical company to formally contest the law, arguing the program's constitutionality, and contending that the IRA was in violation. Specifically, Merck cited the Fifth Amendment, which mandates that the U.S. government must offer "just compensation" when acquiring property for public use. The drugmaker asserted that the IRA permitted the government to acquire innovations without offering fair value in return. Following Merck's lead, J&J and BMS have filed similar lawsuits.