Top Drug Industry Trade Group Sues to Block Medicare Price Negotiations
Health Care

Top Drug Industry Trade Group Sues to Block Medicare Price Negotiations


The pharmaceutical industry’s top lobbying group filed a lawsuit Wednesday arguing that a law enacted last year allowing Medicare to directly negotiate some prescription drug prices is unconstitutional.

The Pharmaceutical Research and Manufacturers of America (PhRMA) was joined by the National Infusion Center Association and the Global Colon Cancer Association in filing the suit in the U.S. District Court for the Western District of Texas. The filing is the fourth seeking to block the Medicare price negotiations, following similar suits in recent weeks from Merck, Bristol Myers Squibb and the U.S. Chamber of Commerce.

The new lawsuit claims that the Inflation Reduction Act, passed by Democrats and signed into law by President Joe Biden last year, violates the constitutional separation of powers and drugmakers’ due process rights as well as the Eighth Amendment’s protection against excessive fines. The suit also claims that the new drug-pricing program “will harm patients, caregivers, physicians, and the broader public interest in pharmaceutical innovation. It will distort the marketplace, inhibit the development of critical new drugs, and disrupt access to needed treatments.”

PhRMA President and CEO Stephen Ubl echoed previous drug industry complaints that the new structure for Medicare negotiations is a sham that seeks to force industry compliance with what amounts to government-mandated pricing.

The Biden administration has defended the Inflation Reduction Act and said it is confident the law will be upheld in the courts. Health and Human Services Secretary Xavier Becerra earlier this month responded to the Merck lawsuit by saying “the law is on our side.” And White House Press Secretary Karine Jean-Pierre said at the time: “There is nothing in the Constitution that prevents Medicare from negotiating lower drug prices.”

Legal experts have largely agreed with the administration.

The first 10 drugs to be subject to price negotiations will be chosen in September, with new pricing due to take effect in 2026. The Congressional Budget Office has estimated that the new drug price negotiations will save Medicare about $100 billion over 10 years.