June 26, 2023

Following Merck, U.S. Chamber of Commerce, Bristol Myers Squibb and PhRMA Sue Administration Over Drug Price Negotiation

The U.S. Chamber of Commerce, Bristol Myers Squibb and PhRMA, the drug industry’s trade association, have filed three separate lawsuits against the Biden administration to block Medicare’s authority to negotiate lower drug prices. They joined Merck, which sued over the policy on June 6.

PhRMA CEO Steve Ubl said the provisions of the Inflation Reduction Act that will allow Medicare to start negotiating prices for certain drugs amount to “a government mandate disguised as negotiation.”

The lawsuits are the next step in an epic battle over the federal government’s efforts to bring skyrocketing drug prices under control. More lawsuits give the industry more opportunities for success, and PhRMA’s suit, filed in a Texas court, means the case could eventually be heard by the staunchly conservative 5th Circuit Court of Appeals.

Legal experts say the pharmaceutical industry will likely file many more lawsuits this fall, as drug corporations ultimately aim to take their battle to the U.S. Supreme Court to strike down the law.

The Alliance, health advocates, and consumer organizations note that negotiating a fair price for drugs is nothing new and is a hallmark of a free market economy — governments and insurance companies around the world negotiate drug prices on behalf of their citizens every day. In the United States, the Departments of Defense and Veterans Affairs and the Medicaid program already negotiate prices. Further, federal, state, and local governments routinely negotiate the cost of other goods they purchase from private sector companies.

“The drug industry needs to quit making insincere arguments and start negotiating a fair deal,” said Robert Roach, Jr., President of the Alliance. “By giving Medicare the ability to negotiate prices, President Biden’s Inflation Reduction Act, once implemented, will save taxpayers and patients $25 billion. We should be building on this law to make sure people can afford the drugs they need to be healthy.”