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Merck & Co. sued the US government on Tuesday in an effort to halt the Medicare drug price negotiation program contained in the Inflation Reduction Act, which it argues violates the Fifth and First Amendments to the Constitution.
This is the first attempt by a drugmaker to challenge the law, which the pharmaceutical industry says will result in a loss of profits that will force them to pull back on developing groundbreaking new treatments.
“This is not ‘negotiation.’ It is tantamount to extortion,” Merck said in the suit filed in US District Court for the District of Columbia.
Americans pay more for prescription medicines than any other country.
The Biden administration’s drug pricing reform aims to save $25 billion annually by 2031 through price negotiations for drugs paid for by Medicare, the government health plan for those age 65 and over.
The lawsuit argues that under the law, drugmakers would be forced to negotiate prices for drugs at below market rates.
Merck asserts this violates the part of the Fifth Amendment that requires the government to pay just compensation for private property taken for public use.
After the government released its roadmap for price negotiations in March, industry lobbyists and lawyers told Reuters that drugmakers were likely to file lawsuits arguing that the government is not complying with the Constitution.
