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Traders work on the floor of the New York Stock Exchange during morning trading, April 10, 2023.
Michael M. Santiago | Getty Images
The pharmaceutical industry’s largest lobby group and two other organizations Wed lawsuit The Biden administration on new Medicare powers to lower drug prices for seniors under the Inflation Reduction Act.
Pharmaceutical Research and Manufacturers of Americaalong with the National Infusion Center Association and the World Colon Cancer Society, argue that Medicare negotiations with drugmakers violate the US Constitution, in a complaint filed in federal district court in Texas.
PhRMA represents many of the world’s largest pharmaceutical companies, incl Eli LillyAnd Pfizer And Johnson & Johnson.
The groups asked the court to declare the program unconstitutional and bar the Department of Health and Human Services from carrying out Medicare negotiations without “adequate procedural protections” for drug manufacturers.
HHS did not immediately respond to CNBC’s request for comment.
It’s the fourth lawsuit challenging the controversial provision of the Inflation Reduction Act, which became law last summer in a major victory for President Joe Biden and Democratic lawmakers.
The policy aims to make drugs more affordable for older Americans, but is likely to reduce the profits of the drug industry. merck And Bristol-Myers Squibb – who are also represented by PhRMA – and the US Chamber of Commerce filed separate lawsuits against the ruling earlier this month.
The latest lawsuit says the plan delegates too much power to HHS.
PhRMA and the two organizations also argue that the ruling includes a “crippling” excise tax intended to force drug companies to accept a government-dictated drug price, making it an excessive fine prohibited by the Eighth Amendment.
The suit also argues that the policy violates due process by denying pharmaceutical companies and public input on how Medicare negotiations should be carried out.
“The price-fixing scheme of the Inflation Act is bad policy that threatens ongoing research and development and patients’ access to medicines,” PhRMA CEO Stephen Ople said in a statement.
“It also violates the US Constitution because it includes barriers to transparency and accountability, gives the executive branch unfettered discretion to set Medicare drug prices and relies on an absurd enforcement mechanism to force compliance,” Ople said.
The first 10 drugs to which the ruling applies will be selected in September, with agreed pricing to take effect in 2026.
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