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Johnson & Johnson On Tuesday, he sued the Biden administration over new Medicare powers to lower drug prices, making it the third drug company to challenge the controversial provision of the Inflation Reduction Act.
The lawsuit, filed in New Jersey federal district court, alleges that the Medicare negotiations violated the First and Fifth Amendments to the US Constitution.
Previous lawsuits filed separately by Merck and Bristol-Myers Squibb, as well as by the US Chamber of Commerce and PhRMA, the pharmaceutical industry’s largest lobbying group, have made similar arguments.
J&J’s complaint asks the judge to stop the US Department of Health and Human Services from forcing the drug company to participate in the program.
The lawsuit aims to stop “Congress’s destructive innovation-destroying excesses that threaten the United States’ primacy in the development of transformative therapies and in patients’ access to those therapies,” according to J&J.
President Joe Biden’s Inflation Reduction Act, passed in 2022 on a narrow party vote, authorized Medicare to negotiate drug prices for the first time in the program’s six-decade history. The policy aims to make drugs more affordable for older Americans, but is likely to reduce the profits of the drug industry.
The Department of Health and Human Services did not immediately respond to CNBC’s request for comment.
J&J said its drug Xarelto, which treats blood clots and reduces the risk of stroke, will be subject to Medicare price negotiations in 2023.
J&J argues that the Medicare negotiations “result in an uncompensated material take” of the company’s property and essentially force J&J to provide access to Xarelto under terms set by the federal government that the company “would not voluntarily agree to.”
Last year, the company generated $2.47 billion in revenue from Xarelto.
This story is evolving. . Please check back for updates
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