Chutzpah. It’s the only way to describe Merck’s plan to sue the government over the plan to negotiate drug prices, saying it is unconstitutional. Merck said in the lawsuit, filed in U.S. District Court in Washington, D.C., that Medicare’s drug-price negotiation program violated the company’s First and Fifth Amendment rights. This is a prime example of what’s wrong with pharma.
Medicare, the country’s biggest buyer of prescription drugs, gained the authority to negotiate the price of certain high-price medicines under the Inflation Reduction Act. Lawmakers, patients, and other supporters said the power was needed to arrest spiraling drug costs. The program, expected to go into effect starting in 2026, could cost drugmakers like Merck billions of dollars in sales. The industry said the program would deter investment in developing new, lifesaving medicines.
The drugs that analysts expect will eventually face price negotiations are Merck’s top-selling product, the cancer immunotherapy Keytruda, which had U.S. sales of $12.7 billion last year.
“This is not ‘negotiation.’ It is tantamount to extortion. And it violates the Constitution,” Merck said in the lawsuit.
No, Merck, this is extortion “the list price for each indicated dose of KEYTRUDA when given every three weeks is $10,897.12. When given every six weeks, the list price for each suggested dose of KEYTRUDA is $21,794.24.
Legal and health-policy experts said Merck would have an uphill battle completely overturning Medicare price negotiation. Still, it may be able to delay its implementation and achieve changes on the margins that are more favorable to the industry. However, you can bet that Merck is hoping to get this case in front of SCOTUS which is corporate friendly.
n September, Medicare officials are scheduled to publish the names of 10 drugs it will start negotiating prices for next year, with the prices to go into effect in 2026. The program will gradually add additional products to its negotiation list, including 15 more drugs in 2027.
The Congressional Budget Office projects that price negotiations will reduce the federal budget deficit by $25 billion and reduce average drug prices in Medicare by 8% to 9% in 2031.
At a time when Congress is taking a hard look at the cost of healthcare, this move is more ammunition to show that profit is first; patients are second.