Merck just filed a lawsuit challenging the legality of the Inflation Reduction Act‘s provision allowing Medicare to negotiate some drug prices with pharmaceutical companies. The administration is holding firm to doing so, notwithstanding. The law is intended to lower drug prices in Medicare.
Merck claims that if negotiated drug prices take effect, it will keep drug manufacturers from innovating new drugs. It wants a court to say that it does not have to take part in drug price negotiations with the federal government. If the issue is innovation, the question becomes how much profit do the pharmaceutical companies need to generate to ensure they innovate and innovate for drugs that we need. Last year, Merck profited $14.5 billion.
In response to the lawsuit, Secretary of Health and Human Services Xavier Becerra said, “We’ll vigorously defend the President’s drug price negotiation law, which is already lowering health care costs for seniors and people with disabilities. The law is on our side.”
The IRA drug price negotiation provision is not set to take effect for another two and a half years. And, in its first year, only 10 drugs that have been on the market for several years without competition will have lower negotiated prices.
Merck is claiming the drug price negotiation law is unconstitutional because it is taking of property for the public without fair compensation. In this country at this time, Merck could win. But, the law is not on Merck’s side.
The IRA drug price negotiation provision is designed to withstand constitutional challenges. It allows Merck to turn down Medicare’s final negotiated price. Merck would then be subject to a tax. But, the tax could end up being hundreds of millions of dollars a day over time, according to Merck’s complaint.
We still don’t know which drugs are included among the 10 the government intends to negotiate prices for in 2026. But, one of Merck’s drugs, Januvia, which some diabetes patients use, could be among them. And, in future years, another Merck drug, Keytruda, which some cancer patients use, could be another.
Public Citizen President Robert Weissman issued the following statement:
“Merck is claiming the U.S. constitution requires the U.S. government and people to be suckers. That’s not true.”
“There’s no Sucker Clause in the 1st Amendment, 5th Amendment, or anywhere else in the Constitution.”
“This lawsuit is a desperate attempt by the industry to beat back popular legislation that would curtail Big Pharma’s ability to price gouge Medicare and secure monopoly profits. Full stop.”
“While Big Pharma’s litigation gambit plays out, it is critical that the federal government continue its preparation for price negotiations. Delay in the commencement of long overdue negotiations will result in billions of dollars in excess costs for taxpayers and consumers.”
Touche!
Here’s more from Just Care:
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