Johnson & Johnson (J&J) has become the latest drugmaker to sue the US government over the Medicare drug price negotiation element of President Biden’s Inflation Reduction Act (IRA).
The IRA allows Medicare, the government health plan for older adults, to negotiate lower prices for a selected group of prescription medicines.
J&J and its Janssen pharmaceutical unit filed the lawsuit specifically against the US Department of Health and Human Services as well as the Centers for Medicare and Medicaid Services, arguing that the plan would force Janssen to supply its patented medicines on pricing terms that, by law, must be significantly below market prices.
“This would upend the current self-sustaining cycle of pharmaceutical innovation that provides patients with access to pioneering treatments, and directly impacts the creation of generic medicines that account for 90% of prescriptions filled in the US,” J&J said in a statement.
It continued: “If manufacturers do not ‘agree’ to the government-dictated terms of the IRA, they face massive penalties up to 1900% of a selected drug’s daily sales or are forced to withdraw all of their products from both Medicare and Medicaid.”
The complaint also argues that the law violates the First Amendment to the US Constitution, that guarantees free speech by compelling the company to make statements it maintains are false and misleading, such as that the prices set under the programme are fair.
Merck & Co, Bristol Myers Squibbs, the US Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America have already sued the government over the plan, citing similar concerns.
A list of the first ten Medicare Part D drugs selected for negotiation is expected to be published by the government in September, according to the Centers for Medicare and Medicaid Services, with the new prices set to be effective in 2026.
The government has already announced the first set of Medicare Part B drugs subject to penalties under the IRA because their prices rose faster than the rate of inflation.
HSS secretary, Xavier Becerra, said at the time of the announcement: “The Biden-Harris administration believes people with Medicare shouldn’t be on the hook when drug companies inexplicably jack up the prices of their drugs.”
He continued: “With the inflation rebate programme, we are fighting to ensure seniors can afford the treatments they need, taxpayers aren’t subsidising drug company excess prices, and the Medicare programme is strong for millions of beneficiaries now and in the future.”