June 6, 2023
Big pharma has just sued the us government in DC federal court because they don’t want to sell their prescription drugs for cheaper.
Pharmaceutical giant Merck just sued the department of health and human services to block Medicare from using its new negotiating power to bring down certain “part d” prescription drug costs for us taxpayers. The power to negotiate 10 widely used, high priced drugs with no generic competition was given to Medicare by Congress when lawmakers passed the inflation reduction act last year. But in the lawsuit, Merck says that power is unconstitutional because it violates their 5th and 1st amendment rights.
Merck says, from their perspective — under this new law, the government “compels” the drug maker to sell a particular drug to Medicare at whatever “fair price the agency dictates which must represent at least a 25 to 60 percent discount.” They say that’s a violation of the 5th amendment that requires the government to provide “just compensation” for property taken for public use. The suit goes on to say, if they don’t comply, they get hit with a massive tax penalty. They say that’s not a negotiation. That’s “extortion.” And a violation of their 1st amendment right to free speech. They want a judge to put a stop to Medicare’s new negotiating power.
It’s worth noting that Merck is making billions of dollars a year off these part d prescription drugs.
The Health and Human Services Secretary responded to the lawsuit saying “the law is on our side.” And the US government will vigorously defend the law that allows Medicare to use its enormous buying power to negotiate lower drug costs for us taxpayers.
This lawsuit is no surprise. Big pharma has been fuming about this Medicare negotiating power since the bill was signed into law… in fact, it’s possible other pharmaceutical giants will join this lawsuit or file their own against HHS. Medicare is expected to release the list of the first 10 drugs available for negotiations by September first with the new prices taking effect in 2026.
Read the lawsuit from Merck here.
Read more from HHS about the new Medicare negotiating power here.
