Insights

Following federal lawmakers’ initiative to lower prescription drug prices under the Inflation Reduction Act of 2022, several states have taken similar steps to limit certain drugs’ prices. Drug affordability for consumers is a top priority for federal and state lawmakers and regulators because it is a bipartisan issue that directly impacts consumers’ wallets. With negotiations between the federal government and drug manufacturers over 10 drugs’ prices for Medicare beneficiaries well underway under the Inflation Reduction Act, 11 states, including Maryland and Colorado, have created drug affordability review boards to more directly tackle rising prices for both brand and generic drugs.[1] And another 12 states have pending legislation to create these boards.[2] 

On March 1, 2024, Judge Colm F. Connolly of the District of Delaware granted the government’s motion for summary judgment in the first substantive ruling on the constitutionality of the Inflation Reduction Act (“IRA”).  The court first held that AstraZeneca Pharmaceuticals LP and AstraZeneca AB’s (collectively, “AstraZeneca”) lacked Article III standing to challenge the Center for Medicare and Medicaid Services’ (“CMS”) guidance under the Administrative Procedure Act (“APA”).  The court then rejected AstraZeneca’s challenge to the IRA as an unconstitutional taking on the merits because, in its view, AstraZeneca “ha[d] not identified a property interest protected by the Constitution that is put in jeopardy by the Program.”[1] The court’s opinion comes on the eve of oral argument in a closely-followed related case in the District of New Jersey and marks a significant development in IRA jurisprudence.

On February 12, 2024, Judge David Alan Ezra of the Western District of Texas dismissed a lawsuit challenging the constitutionality of the Drug Price Negotiation Program of the Inflation Reduction Act of 2022, P.L. 177-169 (IRA).[1]