Potential Implications Of Inflation Reduction Act On Pharmaceutical Patent Litigation

On Aug. 16, 2022, President Biden made headlines by signing the Inflation Reduction Act of 2022 (IRA) into law. The act includes several initiatives targeted toward curbing inflation. One such initiative aims to lower prescription drug prices by allowing the Centers for Medicare & Medicaid Services (CMS)—the division within the Department of Health and Human Services (HHS) that administers the Medicare program—to negotiate a "maximum fair price" (MFP) for a certain number of drug products annually.

In light of this significant change, some have predicted that the IRA will have sweeping effects on the health care industry, including shifting priorities in the context of research and development. There is reason to believe the IRA may also meaningfully impact pharmaceutical patent litigation, potentially altering strategy and limiting the potential amount of damages that are recoverable in some cases.