Drugmakers set plans to remove the Medicare drug-price for seniors at Supreme Court rulings

June 21, 2023: Legal experts stated that the pharmaceutical industry strives to strike down Medicare’s historic powers to slash drug costs for seniors through a Supreme Court ruling.

Drugmaker Merck, the U.S. Chamber of Commerce, and Bristol Myers Squibb filed separate lawsuits within days of each different this month, asking federal courts in Washington, D.C., the Southern District of Ohio, and New Jersey to declare the price negotiations unconstitutional under the First and Fifth Amendments.

The lawsuits are the opening salvo in a historic and potentially decisive battle different the federal government’s efforts to control rising drug prices.

The Inflation Reduction Act, passed in a narrow party-line vote last year, gave Medicare the power to negotiate prices for the first time in the program’s nearly 60-year history, a watershed moment that the Democratic Party had long fought for.

The pharmaceutical industry considers the program a significant threat to revenue growth and profits. The companies claim the program will stifle future drug development in the U.S.

Merck fears its blockbuster cancer therapy Keytruda, which generated 35% of the company’s $59 billion in revenue for 2022, will be targeted by the program in the future. The company also worries the federal government will select its Type 2 diabetes drug Januvia, which generated $2.8 billion in revenue in 2022, for negotiations this year.

Drugmaker Abbvie, a member of the Chamber of Commerce’s Dayton, Ohio, chapter, is defending its blood cancer drug Imbruvica, which generated $4.6 billion in revenue last year, or about 8% of its total sales.

And Bristol Myers Squibb is trying to protect its blood thinner Eliquis, which brought in $11.8 billion in sales last year, or about 25% of the company’s $46 billion total revenue for 2022.

These are the first lawsuits challenging Medicare’s new powers, but they are unlikely to be the last.

The big drugmakers’ lobby group, the Pharmaceutical Research, and Manufacturers of America, told in a statement that it supports the claims made in the lawsuits.