AstraZeneca challenges federal drug price negotiations


AstraZeneca filed a legal challenge to one aspects of the drug price negotiation provisions of the Inflation Reduction Act (IRA) over drugs taken by Medicare patients.

While a press release said the challenge was based on orphan drugs for patients with rare diseases, Pharmaceutical Executive reported the suit claims the negotiations with Medicare are unconstitutional. Other pharma companies are also challenging the negotiations that if unsuccessful, can lead to the drug not being carried under Medicare or a tax.

One of the ten drugs subject to negotiations is AstraZeneca’s Farxiga. The heart failure and diabetes drug can cost more than $500 a month for those without insurance.

AstraZeneca has headquarters, packaging, and logistics operations in Delaware and is based in the United Kingdom.

The negotiations ended legislation that barred the federal government from drug negotiations for Medicare recipients. Click here for a summary of the provisions.


Consumer groups and others have noted troubling trends, such as the price for drugs in the U.S. being much higher than in other nations as well as companies snapping up generic drug lines and raising prices.

AZ claims the drug price negotiation provisions of the IRA also run headlong into the goals of the Orphan Drug Act (ODA), a federal statute designed to encourage manufacturers to invest in new therapies for rare diseases.

“Over the last 40 years, American patients have benefited from the highly effective incentives the ODA put in place, which spurred companies to focus research and development investment on small populations of patients with significant unmet need. The passage of the ODA accelerated innovation, leading to more than 600 medicines treating 1,000 rare conditions today, including cancers. Yet, the vast majority of the 7,000 known rare conditions still have no approved treatments, and continued innovation for small indications is at risk under the IRA,” AstraZeneca stated in a release.

Dave Fredrickson, executive vice president, Oncology Business Unit, AstraZeneca, said: “Rare disease and cancer patients depend upon high-risk, low-probability drug development that takes many years to develop and aims for cure. If today’s version of the law stands, patients in the United States with rare conditions, who have benefited from the Orphan Drug Act, will get delayed access to scientific breakthroughs relative to other parts of the world.”

Astrazeneca cited the example of Lynparza, a cancer medicine approved in 2014 in the US for a small group of late-line ovarian cancer patients. Additional trials added small groups of breast and pancreatic cancer patients, with the most recent indication in prostate cancer approved just this year – nine years later.

“If the IRA had been in place, significant disincentives would have existed for pursuing the late-line ovarian cancer approval in the US, an indication which has benefited patients in great need of this unique medicine for their rare condition,” AstraZeneca stated.

Protecting orphan drugs from the price negotiations would “have a minimal impact on the overall cost to the US healthcare system but a tremendous impact on patients. As a result, AstraZeneca has taken the step of filing a legal challenge to aspects of the IRA, to protect timely access to medicines for orphan indications in the US.”