Third US judge upholds Medicare drug price negotiation program

(Corrects headline and paragraph 4 to state that ruling is third for the Biden administration, not the second)

By Brendan Pierson

(Reuters) -A federal judge in Delaware on Friday upheld a law that requires some drugmakers to negotiate prices with Medicare, one of President Joe Biden's signature initiatives, rejecting a challenge by AstraZeneca.

U.S. District Judge Colm Connolly's decision comes the day before the British drugmaker is due to respond to the U.S. government's initial bid for the price of its blockbuster diabetes drug Farxiga.

AstraZeneca said it was disappointed in the ruling and considering next steps.

The ruling marks the third time the Biden administration's negotiation program has survived a court challenge.

Other drugs chosen for the first round of negotiations include Bristol-Myers Squibb and Pfizer's blood thinner Eliquis, Merck & Co's diabetes drug Januvia and Johnson & Johnson's blood thinner Xarelto. The government's initial bids were not public.

The negotiation program, part of 2022's Inflation Reduction Act (IRA), allows Medicare to negotiate prices for selected high-cost drugs.

Drugmakers that refuse to participate must either pay heavy fines or withdraw altogether from Medicare, which covers 66 million Americans mostly aged 65 and older and accounts for a large share of U.S. prescription drug spending.

(Reporting by Brendan Pierson in New York; Editing by Alexander Smith)