PhRMA Joins Merck, BMS in Latest Lawsuit Challenging IRA’s Drug Price Negotiations

Law books and scales of justice on desk

Pictured: Law books and scales of justice on desk/Courtesy, iStock, Armmy Picca 

Lobbying group Pharmaceutical Research and Manufacturers of America has joined forces with Merck and Bristol-Myers Squibb in filing a lawsuit against the federal government over the price-setting provisions in the Inflation Reduction Act, according to a statement released by the organization Wednesday.

PhRMA, a trade group representing companies in the pharma industry, filed a complaint in the U.S. District Court for the Western District of Texas, along with co-filers the National Infusion Center Association and the Global Colon Cancer Association. The lawsuit seeks to stop enforcement of the price negotiations under the Inflation Reduction Act (IRA), which PhRMA contends is unconstitutional.

The IRA's Drug Price Negotiation Program “violates the Fifth Amendment’s Due Process Clause by exempting key decisions from public input and insulating them from administrative or judicial review,” according to the complaint.

Previously, Merck, BMS and the U.S. Chamber of Commerce filed similar lawsuits, questioning the law’s constitutionality, specifically under the First and Fifth Amendments.

BMS and Merck claimed in their respective complaints that the IRA’s negotiation provision infringes upon the Fifth Amendment, which mandates that the government must provide fair compensation when it acquires private property for public use.

The U.S. Chamber of Commerce, citing the Fifth Amendment in its lawsuit, argued that the IRA violates the First Amendment. “This unprecedented regime of price controls and forced sales flouts bedrock principles of separation of powers and nondelegation, exceeds Congress’s enumerated powers, denies pharmaceutical manufacturers due process of law, imposes excessive fines, and compels speech in violation of the First Amendment,” their suit claimed.

The pharma industry has been fighting the IRA since its inception, arguing that it could lead to reduced innovation and fewer patient drug choices. The industry also claims that the excise tax, which would be levied on manufacturers not complying with the negotiated prices, is unconstitutional.

PhRMA’s lawsuit states that the Drug Price Negotiation Program’s “excise-tax cudgel violates the Eighth Amendment’s Excessive Fines Clause,” as it “aims to force compliance with the sham negotiation scheme by imposing ruinous consequences on any pharmaceutical manufacturer that does not acquiesce.”

The outcome of these legal challenges will have significant implications for drug pricing in the U.S. With Medicare covering more than 60 million Americans, any changes to drug pricing policies could have far-reaching consequences for patients and the pharma industry.

It remains to be seen how the lawsuits will play out, but it is clear that the industry will not give up any time soon, with other drug companies potentially filing their complaints.

Lisa Munger is a senior editor at BioSpace. You can reach her at lisa.munger@biospace.com. Follow her on LinkedIn.

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