HHS and CMS now face lawsuits from the U.S. Chamber of Commerce, two drugmakers and three healthcare organizations over its plan to negotiate prices for the 10 costliest drugs in 2026.
The Inflation Reduction Act, passed in September, will allow the government to negotiate list prices with drug manufacturers of expensive medications that lack generic or biosimilar competition.
Criticism toward this clause gained momentum after Merck filed suit June 6 against these prospective negotiations, alleging the law violates the First and Fifth amendments.
About two weeks later, the U.S. Chamber of Commerce, Bristol Myers Squibb, the National Infusion Center Association, the Global Colon Cancer Association, and the Pharmaceutical Research and Manufacturers of America — a powerful pharma lobbying group that represents dozens of drugmakers — filed similar lawsuits across the country.
In Bristol Myers Squibb's lawsuit, the New York City-based drugmaker said the First Amendment "protect[s] citizens (including businesses) from being forced to violate their convictions by espousing messages they reject" and the Fifth Amendment mandates the government to pay "just compensation" to owners of appropriated private property. BMS said its drugs are private property and will not see fair compensation.
The Inflation Reduction Act's negotiation provision "creates an unprecedented regime whereby [HHS] dictates a price at which pharmaceutical companies are compelled to sell their most innovative and successful medicines or else face unconscionable penalties," BMS said.
Merck made a similar statement in its lawsuit, stating that the negotiations are "tantamount to extortion."
The White House has cast doubt on the legitimacy of the plaintiffs' arguments, and an HHS spokesperson told The Wall Street Journal, "the law is on our side."
Because the lawsuits have been filed in different district courts in various circuits, the proposed deadlines for moving toward these negotiations may be delayed since the court battles could last years, experts told the Journal and CNBC.