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Medicare drug price negotiation plans lead a pharmaceutical trade group to file suit in the US

Medicare drug price negotiation plans lead a pharmaceutical trade group to file suit in the US

On Wednesday, the leading industry lobby group Pharmaceutical Research and Manufacturers of America (PhRMA) announced that it was filing a lawsuit against the United States government to prevent the implementation of a program that grants Medicare the authority to negotiate drug prices.

The drug price negotiation program was deemed unconstitutional by PhRMA, the National Infusion Center Association, and the Global Colon Cancer Association, all of which are members of PhRMA and some pharmaceutical companies, in a complaint filed in a federal court in Texas.

After separate legal challenges from Merck & Co. (MRK.N), Bristol Myers Squibb (BMY.N), and the influential business group the U.S. Chamber of Commerce, this is the fourth lawsuit challenging the law, which is part of President Joe Biden's signature Inflation Reduction Act (IRA).

The pharmaceutical industry asserts that negotiating product prices with the government health plan for Americans over 65 will reduce profits and force them to delay developing ground-breaking new treatments.

Merck and Bristol Myers, among the world's largest pharmaceutical companies, are represented by PhRMA.

Prescription drugs cost more in the United States than anywhere else. By 2031, the Biden administration's drug pricing reform aims to negotiate lower prices for Medicare's most expensive drugs, saving $25 billion annually.

The latest suit contends that the separation of powers principle in the United States is violated by Congress' "unrestrained authority" granted to the Department of Health and Human Services (HHS).

PhRMA general counsel James Stansel stated at a press conference, "Congress took a series of unconstitutional shortcuts, giving the executive branch the open-ended task of replacing market-based prices in Medicare with an entirely new set of prices at the (Medicare) agency's own choosing."

In addition, the lawsuit claims that the price negotiation program violates the Fifth Amendment and the Eighth Amendment of the United States Constitution by excluding key decisions from public input. The Eight Amendment protects against excessive fines.

PhRMA and the other two organizations are requesting a declaration that the IRA's price negotiation is in violation of the Constitution and an injunction against the price caps.

The Medicare and Medicaid Administration is expected to release its list of ten expensive drugs that were initially selected for the process in September, and the agreed-upon prices are expected to take effect in 2026.

The suits testing the arrangement have been recorded in four different government courts, with Merck's in Washington, D.C., the Office of Business in Ohio, and Bristol Myers' in New Jersey.

The White House stated that the United States Constitution does not prohibit Medicare from negotiating lower drug prices in response to previous lawsuits.

On Wednesday, a HHS spokesperson stated that the law is on its side.

"We will vigorously defend the president's drug price negotiation law, which is already helping to lower healthcare costs for seniors and people with disabilities," as the HHS  secretary has already made clear.

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