Merck sues Biden administration over Medicare drug price negotiations
Global drugmaker Merck on Tuesday sued the Biden administration over Medicare's new powers to substantially reduce drug prices for seniors under the Inflation Reduction Act, the opening salvo in the pharmaceutical industry's efforts to weaken the program.
In a scathing complaint filed in federal district court, Merck excoriated the negotiation process as a "sham" and "tantamount to extortion."
The drugmaker accused the federal government of employing what the company described as an unconstitutional scheme to take private property for public use without just compensation in violation of the Fifth Amendment.
Merck said the Department of Health and Human Services compels companies to enter into an agreement that effectively dictates the price of a drug at a 25% to 60% discount under threat of daily excise taxes that are several times higher than the medication's daily revenue.
The company asked the U.S. District Court for the District of Columbia to block HHS from compelling the drugmaker to enter into any agreement under the program to slash prices and void any agreement the company has been forced to enter into.
"Under the IRA, the Government will requisition Merck's patented pharmaceutical products and transfer them to Medicare beneficiaries through forced sales," the company's legal team wrote in the complaint.
"Those forced sales—coerced by the threat of draconian penalties that the Government has admitted no manufacturer could ever rationally afford to pay—will deprive Merck of possession and title to its personal property," Merck's attorneys wrote.
Source: CNBC
