Drug Prices Under Fire: Pharmaceutical Lobby Sues to Halt Inflation Reduction Act Negotiations

US: On Wednesday, the Pharmaceutical Research and Manufacturers of America (PhRMA) made headlines by filing a lawsuit against the Biden administration. According to PhRMA, the drug-price setting components outlined in the Inflation Reduction Act are unconstitutional and infringe upon the civil liberties of pharmaceutical companies. PhRMA President and CEO, Stephen Ubl, stated that the price-setting scheme in the Act is bad policy that threatens continued research and development, as well as patients' access to medicines. Additionally, he claims that this Act violates the U.S. Constitution due to its lack of transparency and accountability barriers, the executive branch's unfettered discretion to set the price of medicines in Medicare, and its reliance on an absurd enforcement mechanism to force compliance.

The Health and Human Services secretary will have the power to establish fair prices for 10 Medicare-covered medications after negotiations with drug manufacturers, thanks to the drug pricing provisions of the Inflation Reduction Act. The act enforces compliance with government-set prices through excise taxes and penalties of up to 95% of total revenue per drug on the list. PhRMA, the National Infusion Center Association, and the Global Colon Cancer Association are calling on the U.S. District Court for the Western District of Texas to prevent the implementation of both the price-negotiating mechanism and the corresponding enforcement taxes and penalties.

A lawsuit has been filed against the Inflation Reduction Act, claiming that it infringes on the due process rights and constitutional protections of a company. The three parties involved in the lawsuit also asserted that the act violates the separation of powers by granting HHS with broad authority to set prices within Medicare without meaningful constraints. Merck, a pharmaceutical giant, also filed a similar lawsuit against HHS earlier this month, arguing that artificially lowering prices will impede critical research and development. Andrew Spiegel, the executive director of GCCA, stated that the Inflation Reduction Act would impede progress and provide less hope for patients struggling with colon cancer without allowing patients a "real seat at the table."

According to Robert Weissman, the President of liberal advocacy organization Public Citizen, the lawsuit filed by Merck is a distressing attempt by the pharmaceutical industry to resist legislative efforts that aim to limit their ability to overcharge Medicare and monopolize profits.

The Inflation Reduction Act of 2022, a groundbreaking federal law in the United States, aims to tackle inflation by potentially reducing the federal government budget deficit, decreasing prescription drug costs, and investing in domestic energy production while prioritizing clean energy promotion.