Current:Home > InvestMerck sues U.S. government over plan to negotiate Medicare drug prices, claiming "extortion"-DB Wealth Institute B2 Expert Reviews
Merck sues U.S. government over plan to negotiate Medicare drug prices, claiming "extortion"
View Date:2024-12-23 22:33:29
Drugmaker Merck is suing the U.S. government over its plan to allow Medicare to negotiate prices for a handful of drugs, calling it "extortion."
The plan, part of the 2022 Inflation Reduction Act, is expected to save taxpayers billions of dollars on common drugs the government pays for. The law directs the Center for Medicare and Medicaid Services to select 10 drugs with no generic or biosimilar equivalents to be subject to government price negotiation. (The list will eventually expand to 20 drugs.)
In its lawsuit, filed on Tuesday in federal court in the District of Columbia, Merck called the program "a sham" that "involves neither genuine 'negotiations' nor real 'agreements.'" Instead, the pharmaceutical firm said the U.S. Department of Health and Human Services selects drugs to be included and then dictates a discount, threatening drugmakers with "a ruinous daily excise tax" if they refuse the conditions.
Merck added that it expects its diabetes treatment, Januvia, to be subject to negotiation in the first round, with diabetes drug Janumet and the cancer drug Keytruda affected in later years.
The Rahway, New Jersey-based drugmaker is seeking to end the program. "It is tantamount to extortion," it said in the complaint.
Health and Human Services Secretary Xavier Becerra, who is named as a defendant in the suit, said in a statement that the agency plans to "vigorously defend" the drug price negotiation plan.
"The law is on our side," he said.
The lawsuit also names HHS and Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services, as defendants.
Merck said the program violates elements of the Constitution, including the Fifth Amendment's requirement that the government pays "'just compensation' if it takes 'property' for public use," according to the complaint.
The drugmaker noted that Congress could have simply allowed HHS to state a maximum price it would pay for a drug, but that would have enabled drugmakers to walk away from talks, leaving millions of Medicare beneficiaries without essential medications, the complaint said.
Instead, Merck said the government uses the threat of severe penalties to requisition drugs and refuses to pay fair value, forcing drugmakers "to smile, play along, and pretend it is all part of a 'fair' and voluntary exchange." This violates the First Amendment, the suit claims, calling the process "political Kabuki theater."
Patient advocate slams Merck
David Mitchell, founder of the advocacy group "Patients For Affordable Drugs Now," slammed Merck's suit as an attempt to "unilaterally set prices that are untethered to quality at the expense of patients."
"The reality is, drug corporations that are subject to Medicare's new authority – and who already negotiate with every other high income country in the world – will engage in a negotiation process after setting their own launch prices and enjoying nine years or more of monopoly profits," Mitchell said in a statement.
He added, "Medicare negotiation is a desperately needed, long-awaited rebalancing of our drug price system that will help millions of patients obtain the medications they need at prices they can afford while ensuring continued innovation."
Medicare is the federally funded coverage program mainly for people who are age 65 and older. Currently, drug companies tell Medicare how much a prescription costs, leaving the federal government and Medicare beneficiaries to pay up.
The Inflation Reduction Act's drug negotiation provisions mark the first time that the federal government will bargain directly with drug companies over the price they charge for some of Medicare's costliest drugs. Government negotiation with drugmakers and price caps on drugs are common in other developed nations.
Republican lawmakers have also criticized President Joe Biden's administration over the drug pricing plan, saying it could deter drugmakers from developing new treatments.
The federal government is expected to soon release rules for negotiating drug prices. In September, it is scheduled to publish a list of 10 drugs that it will start price negotiations on next year. Negotiated prices won't take hold until 2026.
With reporting by the Associated Press.
- In:
- Medicare
- merck
veryGood! (3)
Related
- Armie Hammer Says His Mom Gifted Him a Vasectomy for His 38th Birthday
- Man charged with terrorism over a fire at South African Parliament is declared unfit to stand trial
- Car fire at Massachusetts hospital parking garage forces evacuation of patients and staff
- Horoscopes Today, December 11, 2023
- Horoscopes Today, November 10, 2024
- 2 winning Mega Millions jackpot tickets sold at same California gas station
- Climate talks enter last day with no agreement in sight on fossil fuels
- Tensions between Congo and Rwanda heighten the risk of military confrontation, UN envoy says
- Chicago Bears will ruin Caleb Williams if they're not careful | Opinion
- Closing arguments start in trial of 3 Washington state police officers charged in Black man’s death
Ranking
- US overdose deaths are down, giving experts hope for an enduring decline
- How to watch The Game Awards 2023, the biggest night in video gaming
- Dutch official says Geert Wilders and 3 other party leaders should discuss forming a new coalition
- Hilary Duff Pays Tribute to Lizzie McGuire Producer Stan Rogow After His Death
- Horoscopes Today, November 10, 2024
- Thousands of demonstrators from Europe expected in Brussels to protest austerity measures in the EU
- George Santos is in plea negotiations with federal prosecutors
- Former NHL player, coach Tony Granato reveals cancer diagnosis
Recommendation
-
Gun groups sue to overturn Maine’s new three-day waiting period to buy firearms
-
Skier triggers avalanche on Mount Washington, suffers life-threatening injury
-
18 California children are suing the EPA over climate change
-
UN cuts global aid appeal to $46 billion to help 180 million in 2024 as it faces funding crisis
-
Will Reeve, son of Christopher Reeve, gets engaged to girlfriend Amanda Dubin
-
The UN peacekeeping mission in Mali ends after 10 years, following the junta’s pressure to go
-
Arkansas AG rejects language for proposed ballot measure protecting access to government records
-
Taylor Swift and Travis Kelce’s Kiss Proves He’s King of Her Heart