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Johnson & Johnson on Tuesday sued the Biden administration over Medicare’s new powers to slash drug costs, making it the third pharmaceutical firm to problem the controversial provision of the Inflation Reduction Act.
The lawsuit filed in federal district courtroom in New Jersey argues the Medicare negotiations violate the First and Fifth Amendments of the U.S. Constitution.
Earlier fits introduced individually by drugmakers Merck and Bristol Myers Squibb, in addition to by the U.S. Chamber of Commerce and PhRMA, the pharmaceutical trade’s largest lobbying group, made comparable arguments.
J&J’s criticism asks a choose to dam the U.S. Health and Human Services Department from compelling the drugmaker to take part in this system.
The firm mentioned its go well with goals to cease the “innovation-damaging congressional overreach that threatens the United States’ primacy in creating transformative therapies and in sufferers’ entry to these remedies.”
President Joe Biden‘s Inflation Reduction Act, which handed in 2022 by a slender party-line vote, empowered Medicare to barter drug costs for the primary time in this system’s six-decade historical past.
The provision goals to make medicine extra reasonably priced for older Americans however will doubtless scale back pharmaceutical trade earnings.
The Centers for Medicare and Medicaid Services will publish an inventory of which medicine had been chosen for a primary cycle of negotiations on Sept. 1, with costs taking impact in 2026. The corporations that make these medicine face an October deadline to signal agreements to take part in these negotiations.
J&J mentioned its patented drug Xarelto, which treats blood clots and reduces the danger of stroke, can be topic to price negotiations in 2023 as a result of it’s among the many 10 most generally reimbursed medicine for Medicare Part D sufferers.
J&J argues that Medicare negotiations “inflict an uncompensated bodily taking” of the corporate’s drug and basically pressure J&J to supply entry to Xarelto on phrases set by the federal government that the corporate “would by no means voluntarily” comply with.
The firm claims this violates Fifth Amendment protections in opposition to the federal government seizing non-public property with out simply compensation.
J&J final yr booked $2.47 billion in income from Xarelto.
J&J additionally argues that the brand new provision forces the corporate to agree that the federal authorities is negotiating honest drug costs. That compels J&J to make “false and deceptive statements” in violation of the First Amendment, in accordance with the criticism.
The firm believes the supply would not contain true negotiations because the authorities “unilaterally dictates” drug costs.
Real negotiation entails discovering a manner for each events to freely agree on phrases, J&J mentioned.
“While the Government might select to deceptively describe the Program as involving an ‘settlement’ to ‘negotiate’ a ‘honest’ price, it can not pressure producers to echo its deceptive messaging,” J&J mentioned within the criticism.
HHS mentioned in an announcement it’ll “vigorously defend the President’s drug price negotiation regulation, which is already serving to to decrease well being care prices for seniors and other people with disabilities.”
“The regulation is on our aspect,” the company added, reiterating earlier remarks made by HHS Secretary Xavier Becerra.