On November 20, 2025, the DC District court issued its opinion [1] in a lawsuit where Teva Pharmaceuticals USA, Inc. challenged the validity of the Medicare Drug Price Negotiation Program under the Inflation Reduction Act of 2022 (IRA). The opinion sheds light on how exclusivity under patent law intersects with the price controls of the Drug Negotiation Program. The opinion also underscores that patent rights exist within a regulatory framework where Congress and federal agencies like the Centers for Medicare & Medicaid Services (CMS) and Food and Drug Administration (FDA) can alter the commercial value of exclusivity conferred by patent rights.
The core of the dispute is the new drug pricing regime created by the IRA. Under that law, the government — through CMS — is empowered to negotiate “maximum fair prices” for certain high-cost, single-source drugs covered under the Medicare Drug Price Negotiation Program. Among other things, Teva argued that the IRA interfered with its property interest guaranteed under its patents. Particularly, Teva argued that the Drug Price Negotiation Program forces manufacturers to accept government‑mandated prices for patented drugs, rather than allowing manufacturers to sell their products at fair market value.
The court disagreed. The court noted that patents do not grant the affirmative right to make, use, or sell anything, nor do patents confer a right to sell at a particular price. [2] Additionally, the court found that the price negotiated under the Drug Price Negotiation program was the fair market price. The court also reasoned that “there is no protected property interest in selling goods to Medicare beneficiaries . . . at a price higher than what the government is willing to pay when it reimburses those costs.” [3]
Teva v. Kennedy is among a wave of lawsuits filed by several drug manufacturers challenging the IRA’s Drug Price Negotiation Program on similar grounds. [4] As of this ruling, courts have consistently upheld the legality of the Drug Price Negotiation Program.
Editor: Brenden S. Gingrich, Ph.D.
[1] Teva Pharmaceuticals UNSA, Inc. v. Kennedy, No. 25-113 (D.D.C. 2025).
(available at https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2025cv0113-46).
[2] Id. at 35–36 (internal citations omitted).
[3] Id. at 36 (internal citations omitted).
[4] See, e.g., Novartis Pharms. Corp. v. Becerra et al., No. 3:23‑cv‑14221 (D.N.J. 2023), aff’d 155 F.4th 223 (3rd Cir. 2005); see also Merck & Co., Inc. et al. v. Becerra et al., No. 1:23‑cv‑01615 (D.D.C. 2023) (briefing ongoing) (updates at https://litigationtracker.law.georgetown.edu/litigation/merck-v-becerra-et-al/).
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