Boehringer Ingelheim Joins Legal Battle Against IRA Drug Pricing Provisions
Pictured: Boehringer Ingelheim headquarters in California/iStock, Sundry Photography
The complaint, filed in a Connecticut district court, alleges that the Medicare negotiation program violates the U.S. Constitution’s Fifth Amendment right to due process and just compensation. Boehringer Ingelheim also claims that the program forces pharmaceutical companies to agree that the government’s negotiated prices are fair, thereby breaching the First Amendment.
In addition, the German pharma also cited the Eighth Amendment’s protection against excessive fine, which the company contends the negotiation program violates by imposing an excise tax on companies that refuse to sign its agreement.
“Those draconian provisions impose fines two-and-a-half to 25 times greater than the statutory penalty for criminal tax fraud, making clear that they are unconstitutionally excessive as a matter of law,” the company wrote in its lawsuit.
Boehringer Ingelheim named the Department of Health and Human Services and Centers for Medicare and Medicaid Services as defendants in the case.
President Joe Biden signed the IRA into law in August 2022, aiming to save some $25 billion in drug costs over the next eight years. The IRA gives the HHS the authority to renegotiate prices for some of the most widely prescribed drugs, with the new pricing set to take effect in 2026.
A recent research brief, published earlier this month in the Journal of Managed Care & Specialty Pharmacy, found that the price adjustments from just four medicines could lead to $1.8 billion in savings during its first year of implementation. These products include Amgen’s Enbrel (etanercept), which could sustain at least a 60% discount, and Janssen’s Imbruvica (ibrutinib), which will likely see a 25% cut.
Astellas’ and Pfizer’s Xtandi (enzalutamide) and Pfizer’s Ibrance (palbociclib) will also be up for the first round of IRA negotiations and could be subject to at least a 25% discount, according to the research brief.
Though the IRA promises billions in savings, several biopharma company and industry groups have bristled at its drug price negotiation program.
In June 2023, Merck opened the legal floodgates and filed the first lawsuit challenging the constitutionality of the program, and a few weeks later was followed by Bristol Myers Squibb. Johnson & Johnson, Astellas and industry lobby group Pharmaceutical Research and Manufacturers of America have all also filed their own legal complaints.