Merck sues HHS and CMS, calling plan to negotiate drug prices ‘extortion’

Merck & Co. is suing the US over a law that will allow the government to negotiate prescription-drug prices with pharmaceutical companies — a reform aimed at cutting costs for elderly and disabled Medicare patients that the health-care giant says is “tantamount to extortion.”

In a lawsuit filed Tuesday, Merck argues the negotiation process outlined in President Joe Biden’s Inflation Reduction Act violates the Constitution. The process is a “sham” that allows the government to unilaterally impose its preferred price, according to the suit, and the company is calling for a court stay against any negotiations involving Merck.

“The IRA wields the threat of crippling penalties to force manufacturers to transfer their patented pharmaceutical products to Medicare beneficiaries” for public use, Merck said in the lawsuit. The law is “forcing manufacturers to accept government-dictated payments that represent a fraction of the drugs’ fair value.”