Pharma’s strike-from-all-sides attack on the IRA could be decided by the Supreme Court, PharmaVoice, Alexandra Pecci
Pharma Voice reports Merck & Company and Bristol Myers Squibb in separate lawsuits are filing a multi-directional attack on Biden’s IRA using the first and fifth amendment as the basis for their filing. Industry lobbyists and co-litigants have joined with the two companies and include the Eighth Amendment in their filing in Federal court.
AB: CEO and founder of the Accreditation Council for Medical Affairs, says this approach is more likely to be intentional. I guess if you throw enough stones, you have a greater chance of hitting the target of constitutional by way of SCOTUS.
His own statement being:
“They are using a multi-pronged approach in tandem. The purpose (is) to hit the government on all ends and to ultimately force them to overturn or seriously limit the impact IRA can have.”
AB: Government will not decide this, the courts will.
The 2022 IRA is designed to lower inflation. At the same times it is pumping up certain areas of the economy such as manufacturing and domestic energy. The pharma industry is largely supportive of many measures of the IRA. However, the law has also drawn criticisms for its potential impact on innovations. Some are arguing the IRA could broadly raise the costs of drugs as a result instead of lowering costs.
As I said earlier and the author agrees, Now, the various Constitutional challenges in the lawsuits could set up an eventual showdown between the industry and government in front of the Supreme Court. That is a given as whoever loses will pursue it to SCOTUS.
Companies on the Attack of the IRA
Merck is the first company to file suit against the government in early June. Its complaint did not mince words. In particular, it zeroed in on the IRA’s Medicare Drug Price Negotiation Program calling it a “sham,” “tantamount to extortion,” and “obvious” in the ways it violates the Constitution.
It is claiming the Negotiation Program isn’t a true negotiation. The IRA uses monetary penalties to compel manufacturers to agree to the government’s dictated price. Therefore, the IRA violates the Fifth Amendment.
Merck claims in its complaint.
The “Fifth Amendment requires the Government to pay ‘just compensation’ if it takes ‘property’ for public use. Yet the singular purpose of this scheme is for Medicare to obtain prescription drugs without paying fair market value.”
Further it argues it is being forced to pretend its price mandates are actually negotiations, the government “makes a mockery of the First Amendment” and is tantamount to “political deception.”
Adding . . .
“Conscripting companies to legitimize government extortion is the sort of parroted orthodoxy that the First Amendment’s compelled-speech doctrine forbids.”
AB: I guess the government and taxpayer could argue back the subsidies given to the companies for the drug R&D is returning in the form of having lower prices. Corporations are arguing for both, eating as much of the cake in the form of subsidies funding them and prices. Do Corporations consist of people actually people? SCOTUS thinks so. If half the company or its stockholders has one view and another has a different view, how does it choose. It can not or will not.
Trade groups’ approach
Trade groups also were joining the fray with lawsuits of their own.
Pharmaceutical Research and Manufacturers of America (PhRMA), the National Infusion Center Association and the Global Colon Cancer Association filed a complaint adding Eighth Amendment concerns to the IRA’s price-setting provisions.
It argues the IRA’s “extreme excise ‘tax’ to force manufacturer compliance with the government mandated price . . . is disproportionate to the purported offense making it an excessive fine prohibited by the Eighth Amendment.”
AB: I would argue back, accepting subsidies grants government and people a right to ask for repayment of them in the form of lower prices. While it may challenge its implementation, the companies could not achieve greater profits without subsidies from the government provided by citizens in the form of taxes.
Will others join?
As the author states, the drug price negotiation program isn’t the only part of the IRA industries have issues.
William Soliman, CEO and founder of the Accreditation Council for Medical Affairs . . .
“I do believe others will join because if the industry can show a coalition, that will make the case stronger with more resources and harder to fight for the government.”