On June 21, the pharma sector’s biggest lobbying group, along with two major organisations, went on to sue the Biden administration when it came to the new powers of Medicare to cut medicine prices for seniors as per the Inflation Reduction Act.
Pharma Research and Manufacturers of America, as well as the Global Colon Cancer Association and the National Infusion Centre Association, go on to argue that the Medicare negotiations with the drugmakers violate the constitution of the US, and they have thereby filed a complaint with the federal district court in Texas.
It is well to be noted that PhRMA happens to represent numerous of the largest drugmakers across the world, including the likes of Pfizer, Johnson & Johnson, and Eli Lilly. The groups went on to ask the courts to go ahead and declare the programme unconstitutional and also safeguard the department of health and human services from executing Medicare negotiations sans ample procedural precautions in the case of drug manufacturers.
This marks the fourth lawsuit filed challenging the controversial provision when it comes to the Inflation Reduction Act, which apparently became law last summer in a prominent victory for President Biden as well as the Democratic lawmakers.
The policy looks to make the medicines more affordable when it comes to senior Americans; however, it is likely to cause a dip in the pharma sector’s profits. Merck as well as Bristol-Myers Squibb, which is also represented by the US Chamber of Commerce and PhRMA, filed individual lawsuits against this provision earlier in June.
The recent lawsuit goes on to argue that this plan delegates too much authority to HHS. PhRMA as well as the two pharma giants also put forth the fact that this provision has in it a crippling excise tax that is aimed at compelling the drugmakers to carry out the government-dictated price of drugs, thereby making it an additional fine prohibited by the Eighth Amendment.
The lawsuit also goes on to argue that the policy does violate due process by denying pharma companies as well as public input on how the Medicare negotiations can go on to get executed. As per Stephen Ubl, the CEO of PhRMA, the price-setting scheme within the IRA happens to be a bad policy that threatens continued research and development as well as patients’ access to drugs. He added the scheme also violates the US Constitution since it has in it barriers to ownership as well as transparency, hands over to the executive branch unfettered discretion when it comes to setting the rate of medicines in Medicare, and also relies heavily on an illogical enforcement mechanism so as to push compliance.
Apparently, the first 10 medicines where this provision is going to be applied will be chosen in September, and the agreed prices are going to come into effect in 2026.