US’s Largest Lobbying Group Sues to Stop Medicare Drug Price Negotiation Plan

The U.S.’s largest lobbying group, the conservative U.S. Chamber of Commerce, has become the second prominent group to file a lawsuit to stop a plan for Medicare to be able to negotiate the prices for a handful of drugs, joining pharma giant Merck in alleging that the plan is unconstitutional.

The group announced in a statement on Friday that it is filing a lawsuit against Health and Human Services, the agency that administers Medicare, putting forth a dubious, Big Pharma-backed argument that allowing Medicare to negotiate drug prices is tantamount to “price controls” — an argument that health experts have debunked. They say in their press release that allowing patients to access lower prices would “harm patients” and “limit access to medicine.”

The lawsuit argues that the plan, as put in place under the Inflation Reduction Act (IRA), violates the separation of powers. Similarly to Merck’s lawsuit, it also argues that the plan violates the First and Fifth Amendments; the First because it supposedly forces companies to say they agreed to the lower price, and the Fifth because the government would supposedly be seizing private property without proper compensation, even though the government would still be paying for the drugs.

Chamber of Commerce — which lobbied against the IRA and is known for blocking progress on climate, wealth inequality, and more — additionally claims that, because companies would be subject to fines if they refuse to negotiate, it is a violation of the Eighth Amendment regarding “cruel and unusual punishments.”

In its statement, the group also returns to a familiar argument that allowing Medicare to negotiate drug prices — similarly to what the Department of Veterans Affairs, Department of Defense and Medicaid have already done for decades — would supposedly “stifle American innovation,” despite the fact that it would save the government roughly $25 billion a year.

This refrain has been debunked time and time again. High drug prices limit doctors’ and patients’ choice of drugs, while many patients have to resort to rationing drugs due to cost.

In recent years, the pharmaceutical industry’s profits have soared, with pharmaceutical companies regularly collecting more profits than comparable companies in other industries, raking in hundreds of billions of dollars in profits; these companies have turned around and spent billions of those profits on lobbying and stock buybacks, or tens of millions on CEO pay — money whose impact on “innovation” rarely seems to be questioned.

The innovation of pharmaceutical researchers and scientists is alive and well, whether or not working class patients can afford the fruits of those discoveries. Both the discovery of COVID-19 and the multiple effective vaccines for the virus came about due to a race by innovative scientists — but it is the CEOs who became overnight billionaires over the discoveries.

Merck wants to end Medicare's ability to negotiate some drug prices. Here’s why. Its diabetes drug, Januvia, costs $6,600 a year in the US, but just $192 in France. Its cancer drug, Keytruda, costs $187,000 in the US, but just $87,000 in Germany.

— Bernie Sanders (@SenSanders) June 6, 2023

The lawsuits won’t stop with the Chamber of Commerce’s, it seems. Lobbying group Pharmaceutical Research and Manufacturers of America is also poised to sue over the Medicare drug price negotiation plan.

It’s unclear how far the lawsuits will go. Some legal experts have thrown cold water on the arguments; University of Michigan professor Nicholas Bagley tweeted last week that Mercks’ First and Fifth Amendment claims are “very, very weak” since participation in Medicare is voluntary. Merck has said that it is prepared to bring its lawsuit to the Supreme Court if necessary.