It’s not over yet! Drug companies challenge Medicare drug price negotiation rule

November 7, 2023

The Inflation Reduction Act of 2022 that Congress passed and President Biden signed into law promised to reduce prescription costs for Americans on Medicare. But Big Pharma isn’t giving in that easily.

In August 2023, the U.S. Department of Health and Human Services (HHS) unveiled the first 10 drugs up for price negotiation with Medicare beginning in 2026. The list includes medications addressing various conditions from blood clots to diabetes and heart failure. These 10 drugs accounted for a substantial $50.5 billion in prescription drug costs paid through Medicare between June 2022 and May 2023.

While the companies that make the drugs have agreed to participate in negotiations, their executives and lobbyists are not exactly thrilled, according to a report published by Healthpayer Intelligence. In fact, several companies and organizations are suing, claiming that the program violates the U.S Constitution.

One prominent player in this legal challenge is Merck, the manufacturer of Januvia, one of the first drugs slated for negotiation. Merck’s lawsuit contends that the policy breaches the First and Fifth Amendments and labels the drug price negotiation program as a “sham.” The company also argues that Medicare is obtaining prescription drugs without paying fair market value, which goes against the Fifth Amendment’s requirement of just compensation for property taken for public use.

Other groups, such as the National Infusion Center Association, the Global Colon Cancer Association, and the Pharmaceutical Research and Manufacturers of America, are in this battle, too.

Now, some are requesting a pause in negotiations amid ongoing challenges. It’s a complex situation with far-reaching implications, and it’s one to watch as the legal battles unfold. So, stay tuned as the pharmaceutical industry takes on Medicare’s drug price negotiation rule, reshaping the health care landscape in the process.

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