AstraZeneca, the renowned Covid vaccine manufacturer, has filed a lawsuit against the US government in response to legislation aimed at reducing prescription drug prices. The legal challenge targets President Joe Biden’s Inflation Reduction Act (IRA), which grants the US government the authority to negotiate prices on behalf of Medicare beneficiaries.
The implementation of these new regulations is projected to generate $100 billion in savings for Medicare by 2031, driven by public demands for more affordable medication for elderly and disabled patients. However, pharmaceutical companies argue that price reductions will result in diminished profits and hinder research and development efforts for new therapies.
Bloomberg reported that AstraZeneca asserts it has already been compelled to reduce investment in rare diseases and cancer research due to the IRA. Last year, the United States accounted for approximately 40% of AstraZeneca’s $44.4 billion in revenue.
AstraZeneca’s legal action follows similar steps taken by major US pharmaceutical companies, including Johnson & Johnson, Merck & Co., and Boehringer Ingelheim.
David Fredrickson, AstraZeneca’s Executive Vice President of Oncology, has cautioned against the unintended consequences of the IRA on American patients. Specifically, he highlights the potential impact on individuals who have benefited from the Orphan Drug Act, a legislation that incentivizes pharmaceutical companies to develop treatments for rare diseases such as Huntington’s disease, ALS, and Tourette’s syndrome.
Mr. Fredrickson stated, “Rare disease and cancer patients depend on high-risk, low-probability drug development that takes many years to develop and aims for a cure. If the current version of the law is upheld, patients in the United States with rare conditions who have benefited from the Orphan Drug Act will experience delays in accessing scientific breakthroughs compared to other parts of the world.”
In response to AstraZeneca’s legal action, a spokesperson for the US Department of Health and Human Services, which oversees Medicare, affirmed their commitment to defending the president’s drug price negotiation law. They emphasize that the law is already contributing to cost reductions for elderly and disabled individuals and assert that the law is on their side.
In recent years, AstraZeneca has invested billions of dollars in expanding its expertise in rare diseases through several acquisitions. One notable acquisition was the purchase of rare disease specialist Alexion Pharmaceuticals for $39 billion in 2021.
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