Merck sues over Medicare drug price negotiations
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Merck on Tuesday sued the Biden administration over the Medicare drug price negotiation program in the Inflation Reduction Act.
Why it matters: Merck will litigate the case up to the U.S. Supreme Court if necessary, the company said in a news release accompanying the lawsuit.
The details: The pharmaceutical company claims the Medicare drug price negotiation program is unconstitutional and a "sham" that doesn't involve real negotiations or agreements.
- Merck alleges the law violates the Fifth Amendment, which requires the government to compensate appropriately when it takes property.
- It also says the law goes against the First Amendment by forcing the company to say it's agreed to the Health and Human Service Department's mandated price for a drug and to say the price is fair.
What they're saying: "This is not 'negotiation.' It is tantamount to extortion," the complaint reads.
Remember: The pharmaceutical industry has been hinting at a lawsuit since Congress passed the drug pricing legislation.
- Under an administration timeline, HHS is due to reveal in early September the first 10 high-cost drugs that will be subject to talks with manufacturers. Discussions would begin next February and the maximum negotiated prices will be announced in September 2024.
- The new prices will take effect starting on Jan. 1, 2026.
- Merck says its diabetes drugs Januvia and Janumet and the cancer treatment Keytruda are projected to be subject to negotiations.
