In a bold move following in the footsteps of Merck, Bristol Myers Squibb has filed a groundbreaking lawsuit challenging certain provisions of the Inflation Reduction Act.
Bristol Myers Squibb (BMS) alleges that the Inflation Reduction Act’s measures, which empower Medicare to negotiate and set prices for specific drugs, violate key provisions of the U.S. Constitution. This legal battle adds another layer of political uncertainty to a program aimed at making medications more affordable for millions of seniors.
Briefing
- Bristol Myers Squibb (BMS) challenges certain provisions of the Inflation Reduction Act (IRA) through a groundbreaking lawsuit, following Merck’s lead.
- BMS alleges IRA’s measures violate the U.S. Constitution’s First and Fifth Amendments.
- Legal battles by BMS and Merck cast uncertainty on the future of Medicare negotiations and drug affordability.
The Constitutional Challenge
BMS’s lawsuit contends that the IRA’s price-setting provisions infringe upon the First and Fifth Amendments of the U.S. Constitution. The company argues that the requirement for drug manufacturers to provide their innovative medicines at government-set prices violates the Fifth Amendment’s mandate that the government must provide fair compensation for property intended for the public good.
Additionally, BMS claims that the act’s mandate for companies to publicly endorse Medicare’s negotiated prices constitutes forced speech, contradicting the First Amendment.
While BMS expresses its support for efforts to improve patient access and reduce out-of-pocket healthcare costs, the company maintains serious concerns about the IRA since its inception. BMS emphasizes the potential impact on research and development (R&D) activities and has already adjusted its approach to development programs in oncology and beyond.
The company argues that the IRA’s framework forces difficult choices regarding pursuing new indications and advancing new medications, ultimately hampering innovation and negatively affecting patients who rely on the industry.
Merck’s Lawsuit and Industry Support
Merck, another pharmaceutical giant, initiated a lawsuit against the Department of Health and Human Services (HHS) earlier this month, presenting similar arguments against the IRA. Merck characterized the pricing negotiation measures as “tantamount to extortion.”
Several other drugmakers have expressed their support for the litigation, with some considering filing their own suits against the agency. The industry’s unified opposition to the IRA’s provisions highlights the gravity of the situation and the potential impact on the pharmaceutical landscape.
Congressional Support and Opposition
The IRA faced staunch opposition from Republicans, who unanimously opposed the legislation in both the House and the Senate. Republicans echoed the industry’s concerns that drug pricing negotiations could impede research into new cures.
However, Democrats celebrated the passage of the IRA as a significant political achievement, as previous attempts to allow Medicare to negotiate drug costs under the Part D benefit program had been unsuccessful.
Other countries have previously implemented similar measures to control drug prices, contributing to a disparity that often sees U.S. patients paying more than their counterparts abroad for the same medications. Medicare Part D benefits are projected to reach approximately $119 billion next year, with estimates suggesting that this figure could more than double by the end of the decade. The IRA aims to address these disparities in drug pricing and reduce overall healthcare costs for seniors.
What’s next?
The legal battles initiated by Merck and BMS have introduced uncertainty into the implementation of the IRA’s provisions. The fate of Medicare negotiations hinges on the outcome of these lawsuits. If successful, the pharmaceutical industry may retain greater control over drug pricing, potentially hindering efforts to make medications more affordable for seniors. The Biden administration has expressed its commitment to defending Medicare’s bargaining power and ensuring that seniors benefit from lower drug prices.
Bristol Myers Squibb’s decision to challenge the IRA through a lawsuit adds another layer of complexity to the ongoing debate surrounding Medicare negotiations. The constitutional arguments put forth by BMS and Merck highlight the potential implications for innovation, patient access, and drug pricing. As these legal battles unfold, the future of Medicare negotiations remains uncertain, with significant consequences for the pharmaceutical industry, seniors, and the broader healthcare landscape.
Read: The Unintended Consequence of IRA, an interview with Dr John LaMattina
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