BMS Follows Merck’s Lead, Sues Government Over Drug Pricing Negotiation

Pictured: White and pink BMS logo on blue and white building/iStock, hapabapa

Pictured: White and pink BMS logo on blue and white building/iStock, hapabapa

Friday, Bristol Myers Squibb filed a lawsuit against the Biden administration, alleging that an upcoming Medicare drug negotiation program violates the First and Fifth Amendments of the U.S. Constitution, according to a report by Reuters.

BMS is the second pharma company to launch a legal challenge to these negotiation plans after Merck was the first out of the gate earlier this month, also targeting the Biden administration’s Inflation Reduction Act (IRA), which includes a provision that seeks to lower drug prices.

In BMS’ lawsuit, filed in the U.S. District Court for the District of New Jersey, the company is moving to have the provision declared unconstitutional. If the drug price negotiation program comes into force, BMS alleges that it would force pharma companies to give big discounts to Medicare and sell their products below market value.

In particular, BMS claims that the negotiation provision violates the Fifth Amendment, which requires the state to provide just compensation whenever it takes private property for public use, according to a CNBC report.

BMS is also accusing the Department of Health & Human Services (HHS), the defendant in the lawsuit, of making the company “parrot its preferred political messaging” by insisting that it publicly position the IRA provision as a negotiation and thereby violating the First Amendment.

Pres. Joe Biden signed the IRA into law in August 2022, which over the next eight years aims to save the government $25 billion in drug costs. Under the IRA, HHS will be able to renegotiate prices for some of the most widely prescribed medicines, which will take effect in 2026.

Days after the IRA was passed, the biopharma industry blasted the policy, highlighting its potential threats to innovation and unintended consequences on R&D investment. Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America, called the IRA a “tragic loss for patients.”

For BMS, the IRA’s negotiation provision will almost certainly affect its blood thinner Eliquis (apixaban), which, according to an October 2022 review article, is among the drugs that the Centers for Medicare & Medicaid Services (CMS) spent the most on in 2020, amounting to more than $9.9 billion in expenditures.

Cancer treatment Opdivo (nivolumab) is also on the list of drugs, accounting for nearly $1.6 billion in CMS spending in 2020. Merck’s anti-diabetic drug Januvia (sitagliptin) will also likely be affected by the IRA’s negotiation provision.

In 2022, Opdivo brought in more than $8.2 billion in sales for BMS, while Eliquis made nearly $12 billion. Both medicines were BMS’ top-earning drugs for 2022. Merck earned $2.8 billion from Januvia last year.

Tristan Manalac is an independent science writer based in metro Manila, Philippines. He can be reached at tristan@tristanmanalac.com or tristan.manalac@biospace.com.

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