D.C. Circuit Appears Sceptical of Teva Challenge in Medicare Drug Pricing Fight

A U.S. appeals court hearing over Medicare drug price negotiations has added to mounting pressure on pharmaceutical companies challenging the Inflation Reduction Act’s pricing regime.

During oral arguments before the D.C. Circuit, judges appeared sceptical of arguments brought by Teva Pharmaceuticals over how regulators classify medicines for Medicare price negotiations. The case marks the first major appeal in a growing wave of litigation targeting the federal government’s new authority to negotiate prices for some of the country’s most expensive medicines.

At the centre of the dispute is Teva’s movement disorder treatment Austedo. The company argues regulators improperly treated two versions of the drug, including an extended-release formulation, as a single product for discount purposes under the Inflation Reduction Act.

Judge Florence Pan repeatedly questioned whether Teva’s interpretation conflicted with Congress’ broader aim of targeting the highest-cost drugs within Medicare spending. The exchanges suggested the court may be reluctant to narrow the scope of the pricing framework.

The hearing also touched on another issue attracting industry attention: how generic competition affects exemption from negotiated discounts. Teva argued regulators had overstepped by introducing a “bona fide marketing” standard when assessing whether generic products qualify for exemptions.

The broader pharmaceutical industry is closely monitoring these cases as companies continue attempting to slow or limit implementation of the Inflation Reduction Act’s pricing measures. Multiple drugmakers, including AstraZeneca, Bristol Myers Squibb, Johnson & Johnson, Novartis and Novo Nordisk, currently have related petitions pending before the U.S. Supreme Court.

While no ruling has yet been issued, the hearing suggested courts may continue giving regulators significant room to implement the pricing programme, despite industry resistance.

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A U.S. appeals court appeared sceptical of Teva Pharmaceuticals’ ($TEVA) challenge to Medicare drug price negotiations during a key D.C. Circuit hearing this week.

The case is one of the first major appellate tests of the Inflation Reduction Act’s pricing framework and could shape how regulators apply negotiated discounts to some of the industry’s highest-cost medicines.