Merck lawsuit drug pricing law – Check Details Here
Merck may be the first company to sue and try to stop the Inflation Reduction Act.
However, other pharmaceutical companies will probably join the legal battle. The primary objective of the lawsuit is to prevent the United States from disclosing the initial roster of drugs eligible for pricing negotiation under Medicare. Merck argues that this action violates certain rights, as the company claims that the
IRA violates the First and Fifth Amendments by forcing the company to give discounts without the option of walking away, according to the suit, which was filed Tuesday in the US District Court for the District of Columbia.
Merck, which is largely viewed as a staid corporate leader, described the legislation as “political Kabuki theater” in the lawsuit. However, HHS said it plans to defend the drug price negotiation law. “The law is on our side,” HHS Secretary Xavier Becerra said in a statement.
Chris Viehbacher
Merck is almost certain to have allies quickly join its side. Just hours after the lawsuit was filed, Biogen CEO Chris Viehbacher said at the BIO meeting in Boston that he wasn’t surprised by the suit and agreed with its description of the IRA as “extortion.” Viehbacher, the former CEO of French pharma Sanofi, said the law goes far beyond the rules in less pharma-friendly Europe.
“The governments in Europe never put anything anywhere near the draconian measures that are in the IRA,” he said.
Viehbacher said he wouldn’t be surprised if more companies file lawsuits, and that Biogen is looking at that option. PhRMA, the industry lobbying group, also appeared to raise the specter of additional lawsuits.
“The price-setting provisions in the Inflation Reduction Act raise a number of serious concerns, including constitutional violations as outlined in Merck’s complaint,” PhRMA spokesperson Nicole Longo said in a statement. “We will continue to consider every tool available to protect patients and future innovation, which includes potential litigation.”
As part of the legislation, which became law last summer, the CMS is required to publish a list of the 10 Medicare Part D drugs that it plans to include in the Medicare Drug Price Negotiation Program by Sept. 1. Merck said it expects its diabetes drug Januvia will be included in that round, and its crown jewel Keytruda — which generated $21 billion in sales last year — will probably be listed in the future.
Filing the lawsuit now may halt the process to name the first 10 drugs, according to Chris Meekins, a Raymond James analyst and former HHS official.
“The arguments they’re making are the ones that everyone knew were going to be made,” he said. “Now we get to a point of which judge they get and whether they can get a stay prior to being named.”
With the deadline for the law’s first regulatory actions approaching, industry insiders expected a legal challenge of some sort, though many were surprised it came from Merck and that it landed before Medicare put out the first list of drugs.
Anna Kaltenboeck
“It’s an interesting choice to do it before selection, right?” Anna Kaltenboeck, head of prescription drug reimbursement practice at consulting firm ATI Advisory, who co-authored the IRA’s drug-negotiation section. “They’re not waiting. They are prospectively doing this.”
Merck is working with Jones Day, a law firm known for hiring Supreme Court clerks, and said in a statement accompanying the lawsuit that it “intends to litigate this matter all the way to the US Supreme Court if necessary.”
“By coercing Merck to provide its drug products at government-set prices, the program takes property for public use without just compensation,” the company said in the statement.
Nicholas Bagley, a University of Michigan law professor who writes extensively about healthcare, disagreed with Merck’s claim that it was being forced into negotiations. While Medicare and Medicaid are enormous programs that are vital to Merck’s business, and exiting them would be disastrous for the company — and highly problematic for patients — the company can, ultimately, decide to pull out, Bagley argued.
In a Twitter post, Bagley explained that Medicare and Medicaid are optional programs that present an agreement to healthcare providers, including pharmaceutical companies: If they comply with the program’s regulations, they receive financial compensation. Bagley emphasized that since Merck is not obligated to sell its drugs at reduced prices, the government cannot be considered as confiscating any of its assets.
In Europe, for example, drugmakers have occasionally declined to sell new products while they negotiated with governments over pricing. Earlier this year, for example, Bristol Myers Squibb declined to launch its cancer medicine Opdualag in Germany after failing to reach what the company thought would be a fair reimbursement level. Such actions have resulted in protests in Europe by patients with governments and pharma companies in standoffs.
The reaction in the US to such a situation would likely be severe.
“Merck’s best argument may be that it actually can’t just walk away from Medicare because the IRA prevents it from exiting right away,” Bagley said.
Endpoints News reached out to other drugmakers for comment in response to Merck’s suit.
Merck lawsuit drug pricing, Merck lawsuit drug pricing
