U.S. pharmaceutical company Johnson & Johnson (J&J) announced Tuesday it will sue the Department of Health and Human Services (HHS) over its Medicare drug pricing program. It is the latest of several groups challenging provisions set out in the Inflation Control Act.
J&J, along with pharmaceutical companies Merck & Co., Bristol-Myers Squibb, and two industry groups, are calling for a block on the Medicare drug bargaining program. As with other complaints filed, the company claims the program stifles medical innovation.
“The IRA violates a treaty at the heart of patent and regulatory law. When a company invests in and successfully develops an innovative new treatment, it gives them time-limited, constitutionally protected rights in that innovation. ,” J&J said in the paper. release.
The complaint, filed in New Jersey district court, appears to suggest that the pharmaceutical companies do not view the IRA-established process as “genuine” negotiations, accusing the federal government of coercion. Other plaintiffs say they are open to negotiating drug prices but have doubts about how the government intends to proceed.
Participation in drug price negotiations is voluntary, but not negotiating is costly. Companies that don’t want to get involved have the option of being subject to excise taxes or terminating their relationship with Medicaid, which means giving up a very lucrative revenue stream.
As in previous lawsuits, J&J argued that its constitutional rights were violated by the HHS program and that the negotiation amounted to forced speech. The company is asking the court to declare the program a violation of its constitutional rights and to declare contracts signed under the program void.
HHS recently revised its guidelines on how to negotiate, apparently in response to the influx of lawsuits, explaining what steps to take during negotiations and how companies can avoid sales tax if they don’t want to discuss drug prices. clarified.
Groups suing to stop negotiations were not reassured by the amendments. One of the plaintiffs, the Chamber of Commerce, filed a motion last week to block the implementation of the drug price negotiation program while it is being challenged in court.
Negotiations will run through 2023-2024, but the new prices won’t come into force until 2026. The first 10 items to be negotiated are expected to be announced in September within two months.
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