Merck sues Biden administration over Medicare drug price negotiations
Last edited Tue Jun 6, 2023, 02:58 PM - Edit history (3)
Source: CNBC
Global drugmaker Merck on Tuesday sued the Biden administration over Medicare’s new powers to substantially reduce drug prices for seniors under the Inflation Reduction Act, the opening salvo in the pharmaceutical industry’s efforts to weaken the program. Merck called the law’s drug price negotiation program a “sham” and “tantamount to extortion” in a scathing complaint in federal court in Washington D.C.
The company also accused the federal government of employing what the suit describes as an unconstitutional scheme to take private property for public use without just compensation in violation of the Fifth Amendment. Merck’s complaint asks a judge to block the U.S. Health and Human Services Department from compelling the drugmaker to participate in the program.
Merck last year booked $2.8 billion in revenue from its Type 2 diabetes drug Januvia, a medication that it said will be subject to Medicare price negotiations in 2023. The company also anticipates its blockbuster cancer immunotherapy treatment Keytruda and its other diabetes drug Janumet will be subject to the program in subsequent negotiation cycles. The drugmaker booked $21 billion in sales from Keytruda in 2022 and $1.7 billion in sales from Janumet. Keytruda represented 35% of Merck’s total revenue last year.
HHS Secretary Xavier Becerra, in response to Merck’s suit, 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,” said Becerra, whose department oversees Medicare, the federal health coverage program for older Americans and people with Social Security disability benefits. Nearly 60 million Americans are enrolled in Medicare.
Read more: https://www.cnbc.com/2023/06/06/merck-sues-biden-administration-over-medicare-drug-price-negotiations.html
They better watch out for the SCOTUS, which may become the final arbiter of what drugs are "approved" to be sold at all and Merck may find themselves on the "losing end" of that equation.
Article updated.
Previous articles -
The drugmaker accused the federal government of employing what the company described as an unconstitutional scheme to take private property for public use without just compensation in violation of the Fifth Amendment. The Inflation Reduction Act, which became law last summer, was a major victory for President Joe Biden and Democrats in Congress, who have long pushed to empower Medicare to combat rising drug prices.
The pharmaceutical industry has fiercely opposed the law, arguing it will stifle new drug development. Merck said the Department of Health and Human Services compels companies to enter into an agreement that effectively dictates the price of a drug at a 25% to 60% discount under threat of daily excise taxes that are several times higher than the medication's daily revenue.
Merck has asked a judge to block HHS from compelling the drugmaker to participate in the program. "Under the IRA, the Government will requisition Merck's patented pharmaceutical products and transfer them to Medicare beneficiaries through forced sales," the company's legal team wrote in the complaint. "Those forced sales--coerced by the threat of draconian penalties that the Government has admitted no manufacturer could ever rationally afford to pay--will deprive Merck of possession and title to its personal property," Merck's attorneys wrote.
The drugmaker accused the federal government of employing what the company described as an unconstitutional scheme to take private property for public use without just compensation in violation of the Fifth Amendment. The Inflation Reduction Act, which became law last summer, was a major victory for President Joe Biden and Democrats in Congress, who have long pushed to empower Medicare to combat rising drug prices.
The pharmaceutical industry has fiercely opposed the law, arguing that it will stifle new drug development. Merck said the Department of Health and Human Services compels companies to enter into an agreement that effectively dictates the price of a drug at a 25% to 60% discount under threat of daily excise taxes that are several times higher than the medication's daily revenue.
The company asked the U.S. District Court for the District of Columbia to block HHS from compelling the drugmaker to enter into any agreement under the program to slash prices and void any agreement the company has been forced to enter into. "Under the IRA, the Government will requisition Merck's patented pharmaceutical products and transfer them to Medicare beneficiaries through forced sales," the company's legal team wrote in the complaint.
Original article -
The drugmaker accused the federal government of employing what the company described as an unconstitutional scheme to take private property for public use without just compensation in violation of the Fifth Amendment. Merck said the Department of Health and Human Services compels companies to enter into an agreement that effectively dictates the price of a drug at a 25% to 60% discount under threat of daily excise taxes that are several times higher than the medication's daily revenue.
The company asked the U.S. District Court for the District of Columbia to block HHS from compelling the drugmaker to enter into any agreement under the program to slash prices and void any agreement the company has been forced to enter into.
"Under the IRA, the Government will requisition Merck's patented pharmaceutical products and transfer them to Medicare beneficiaries through forced sales," the company's legal team wrote in the complaint. "Those forced sales--coerced by the threat of draconian penalties that the Government has admitted no manufacturer could ever rationally afford to pay--will deprive Merck of possession and title to its personal property," Merck's attorneys wrote.
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