AstraZeneca sues US over Medicare drug price negotiation plans

(Reuters) -AstraZeneca said on Friday it has sued the U.S. government to block parts of a program that gives the Medicare health insurance plan the power to negotiate lower drug prices.

The British drugmaker, which filed its complaint in a Delaware district court, joins other drugmakers and business groups claiming that the program would restrict the development of new medicines.

The program faces at least seven other court challenges, including from leading industry group PhRMA and drugmakers Johnson & Johnson (NYSE:), Merck & Co, Bristol Myers (NYSE:) Squibb and privately-held Boehringer Ingelheim.

The drug price negotiation program is part of President Joe Biden’s signature Inflation Reduction Act (IRA).

AstraZeneca (NASDAQ:) said it was filing the legal challenge to “protect timely access to medicines for orphan indications” in the United States.

The U.S. government offers several incentives to develop treatments that target orphan indications or rare conditions once they are launched in the market.

‍AstraZeneca said the program would deter continued development of treatments such as its cancer drug Lynparza and rare blood disorder drug Soliris, which carry orphan drug status for multiple conditions.

The U.S. Department of Health and Human Services (HHS), which oversees the Medicare program for Americans aged 65 and older, is set to begin negotiations next month over 10 high-priced drugs, to be chosen by the agency unless it is blocked by a court.

An HHS spokesperson said in a statement that the agency “will vigorously defend the President’s drug price negotiation law, which is already helping to lower healthcare costs for seniors and people with disabilities.”

The negotiated prices would take effect in 2026.