J&J sues Biden administration over Medicare drug negotiations

Johnson & Johnson on Tuesday sued the Biden administration over Medicare’s recent powers to slash drug prices, making it the third pharmaceutical company to challenge the controversial provision of the Inflation Reduction Act.  

The lawsuit filed in federal district court in Recent Jersey argues the Medicare negotiations violate the First and Fifth Amendments of the U.S. Structure.

Earlier suits brought individually by drugmakers Merck and Bristol Myers Squibb, in addition to by the U.S. Chamber of Commerce and PhRMA, the pharmaceutical industry’s largest lobbying group, made similar arguments.

J&J’s criticism asks a judge to dam the U.S. Health and Human Services Department from compelling the drugmaker to take part in this system.

The corporate said its suit goals to stop the “innovation-damaging congressional overreach that threatens america’ primacy in developing transformative therapies and in patients’ access to those treatments.”

President Joe Biden’s Inflation Reduction Act, which passed in 2022 by a narrow party-line vote, empowered Medicare to barter drug prices for the primary time in this system’s six-decade history. 

The supply goals to make drugs more cost-effective for older Americans but will likely reduce pharmaceutical industry profits. 

The Centers for Medicare and Medicaid Services will publish a listing of which drugs were chosen for a primary cycle of negotiations on Sept. 1, with prices taking effect in 2026. The businesses that make those drugs face an October deadline to sign agreements to take part in those negotiations.

J&J said its patented drug Xarelto, which treats blood clots and reduces the chance of stroke, will likely be subject to cost negotiations in 2023 since it is among the many 10 most generally reimbursed drugs for Medicare Part D patients.

J&J argues that Medicare negotiations “inflict an uncompensated physical taking” of the corporate’s drug and essentially force J&J to supply access to Xarelto on terms set by the federal government that the corporate “would never voluntarily” comply with.

The corporate claims this violates Fifth Amendment protections against the federal government seizing private property without just compensation.

J&J last yr booked $2.47 billion in revenue from Xarelto.

J&J also argues that the brand new provision forces the corporate to agree that the federal government is negotiating fair drug prices. That compels J&J to make “false and misleading statements” in violation of the First Amendment, in keeping with the criticism.

The corporate believes the supply doesn’t involve true negotiations for the reason that government “unilaterally dictates” drug prices. 

Real negotiation involves finding a way for each parties to freely agree on terms, J&J said.

“While the Government may decide to deceptively describe the Program as involving an ‘agreement’ to ‘negotiate’ a ‘fair’ price, it cannot force manufacturers to echo its misleading messaging,” J&J said within the criticism. 

HHS said in an announcement it should “vigorously defend the President’s drug price negotiation law, which is already helping to lower health care costs for seniors and folks with disabilities.”

“The law is on our side,” the agency added, reiterating previous remarks made by HHS Secretary Xavier Becerra.