Drug company sues Biden administration over mandate seen as extortion.
Pharmaceutical Giant Sues Biden Administration Over New Mandate That ‘Borders on Extortion’
“This slow rolling government takeover of the pharmaceutical industry will strangle innovation, denying essential medicines to patients desperate for newer, more effective treatments.”
Merck & Co., a pharmaceutical company, has filed a lawsuit against the Biden administration over its “Drug Price Negotiation Program,” which the company argues violates the Constitution. The program, approved through the Inflation Reduction Act, allows the Department of Health and Human Services (HHS) to negotiate prices for high-cost prescription drugs and imposes an excise tax on companies that “refuse to negotiate.”
The lawsuit alleges that the program violates the Fifth Amendment by taking private property without providing “just compensation” and the First Amendment by compelling companies to “legitimize government extortion” and participate in “political deception.”
The program involves “neither genuine ‘negotiations’ nor real ‘agreements,’” the lawsuit says. “Rather, once HHS unilaterally selects a drug for inclusion in the program, its manufacturer is compelled to sign an ‘agreement’ promising to sell the drug to Medicare beneficiaries at whatever ‘fair’ price the agency dictates, which must represent at least a 25% to 60% discount.”
Merck believes its anti-diabetes drug, Januvia, will be one of the first 10 “negotiation-eligible drugs” chosen in September, per the lawsuit.
Consequences for Patients and Innovation
In an open letter published Tuesday, Merck said the program will have “devastating consequences for millions of patients in need” by limiting innovation. “Under the IRA, the government will take Merck’s patented innovations by coercing the company to provide third parties with access at prices the government sets,” the company wrote.
Josh Blackman, professor of law at the South Texas College of Law Houston, said in a statement that the government cannot “force pharmaceutical companies to ‘sell’ their patented drugs.”
Joe Grogan, nonresident senior fellow at the USC Schaeffer Center, called the program “a price fixing regime a Soviet bureaucrat would be proud of.”
Launch of the Program
HHS intends to launch the program on Sept. 1 with the publication of its first 10 “negotiation-eligible drugs.” HHS did not immediately respond to a request for comment.
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Source: The Western Journal
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