Patient Advocates Mock Merck's 'Bogus' Drug Price Negotiations Suit

The drugmaker this week filed suit against HHS, complaining that the Medicare price negotiation mandate is 'unconstitutional.'

Patient advocacy groups responded with derision and scorn this week to the news that Merck & Co. is suing the federal government to block the looming start of Medicare's Drug Price Negotiation Program.

"Merck's ridiculous lawsuit is the equivalent of a toddler throwing a temper tantrum," says Richard Fiesta, executive director of the Alliance for Retired Americans.

"Americans pay the highest prices in the world for prescription drugs and too many seniors must choose between putting food on the table and paying for their medicine. That is because corporations like Merck have been allowed to charge taxpayers whatever they want for their drugs," Fiesta says.

David Mitchell, a cancer patient and founder of Patients For Affordable Drugs Now, calls the suit "bogus," and ridicules the drug maker's assertion that the negotiation authority granted to the Centers for Medicare & Medicaid Services is "tantamount to extortion."

"The truth is, Big Pharma companies like Merck are the ones who have been extorting patients for years, forcing them to pay unjustified prices or sacrifice their health," Mitchell says.

"The reality is, drug corporations that are subject to Medicare's new authority – and who already negotiate with every other high-income country in the world – will engage in a negotiation process after setting their own launch prices and enjoying nine years or more of monopoly profits."

Sen. Ron Wyden (D-OR), chairman of the Senate Finance Committee, says "it's no surprise that Big Pharma wants to stop Medicare from negotiating lower drug prices on behalf of American seniors."

"I expect the Biden Administration to vigorously defend Medicare's bargaining power so seniors will see the lower drug prices they expect," Wyden says. I have deep concerns that a Republican administration would roll over for Big Pharma and once again ban Medicare from negotiating lower drug prices."

The Medicare Drug Price Negotiation Program was a key provision in the 2022 Inflation Reduction Act. It allows Medicare, for the first time ever, to leverage its unmatched market power to negotiate with drug makers for certain high-price drugs. The negotiations start in September but will be limited to 10 drugs named by Medicare.

Merk's type 2 diabetes drug Januvia has been mentioned as a candidates for the negotiations list.

Merck Alleges 1st, 5th Amendment Breaches

Merck issued a statement this week saying that the suit is justified because the price negotiation program would hamstring the "bio-pharmaceutical sector's ability to address health threats." 

"On average, it takes a decade and more than $2.5 billion to develop a new drug. Since 2000, companies like ours have invested more than $1.1 trillion in the search for new treatments and cures, including $102.3 billion in 2021 alone. This investment has led to incredible breakthroughs for patients. Unfortunately, this progress is now at risk due to unconstitutional provisions in the IRA."

"By coercing Merck to provide its drug products at government-set prices, the program takes property for public use without just compensation in violation of the Fifth Amendment. In addition, the IRA creates the false impression that innovators like Merck are voluntary participants in its program by coercing them to sign an "agreement" conveying that the government-set prices are the "fair" result of a "negotiation." That compelled mirroring of the government's political message violates the First Amendment," Merck says.

In addition to its unconstitutionality, Merck says the the IRA will stifle biopharmaceutical research and development.

"Take for example the impact on cancer therapies. Investments by Merck and others in the biopharmaceutical sector have led to important progress in the treatment of earlier-stage cancer, most notably lung cancer. With increased adoption of screening, we have now reached an inflection point at which we are poised to bend the trajectory of the societal burden of cancer. The IRA makes further investment in treatments for earlier-stage cancer and screening far more difficult."

"Because this statute unlawfully impairs our core purpose of engaging in innovative research that saves and improves lives, Merck intends to litigate this matter all the way to the U.S. Supreme Court if necessary. While we do not believe the program is the right approach for continuing to advance global health on behalf of millions of patients in need, Merck remains committed to working with the U.S. government to enable patient-focused innovation, value and access," Merck says.

P4ADNow says Medicare Part D has spent more than $17 billion on the Merck's diabetes drug Januvia, priced at $547 for a month's supply and used by nearly 1 million Medicare beneficiaries. The drug has been on the market since 2006 without competitors since 2017.

"Despite Merck's false claims about innovation, Medicare negotiation will reduce U.S. spending on drugs by only about $25 billion a year in a market projected to be more than $850 billion per year — less than a 3% reduction in spending cannot possibly cripple innovation," P4ADNow says."

Mitchell challenges Merck's claims that the program would stifle innovation.

"The framework laid out by Medicare for negotiation will actually incentivize innovation because the government will pay more for more innovative products by centering the clinical value of a drug in the negotiation process," he says.