Merck Files Lawsuit Against US Government Regarding Price Negotiation For Medicare Drug


The United States government was on the accused side of a lawsuit filed by Merck, the pharmaceutical giant, on June 6th. The central subject was a law that came into force in the previous year. The law gave Medicare the power to negotiate the costs of particular medications.

Merck Claims Harm To Future Investments Over New Law

According to the claims of Merck, the provision, which was a component of the Inflation Reduction Act, does not fit the spirit of the Constitution. Furthermore, the company claims that it is a stifling threat to any future investments in the industry with regard to several drugs, including ones used for cancer treatment.

Medicare has only received this power to ask for lower prices for administered prescription drugs now, ever since its formation. It is only applicable to those drugs that doctors’ offices administer or are available for purchase at pharmacies. The program has the objective of lowering prices for the elderly, strengthening Medicare, as well as promoting market competition.

However, Merck refuses to accept this program as the correct approach. According to a company statement, the program coerces the company to sell the products at prices set by the government. As such, public use property is being taken without the company receiving appropriate compensation. This, the company views, is a Fifth Amendment violation.

A further argument is that the law is also a First Amendment violation, as it requires a conveyance of agreement by the manufacturers regarding the ‘fair’ prices of HHS. The complaint calls it legitimized government extortion and the whole process as a conscription of companies to said extortion. Xavier Becerra, the Health and Human Services Department’s Secretary, responded to the case by saying that their side has the support of the law.