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ROUNDUP: Pharma Company Merck Files Lawsuit to Protect Sky High Profits

By June 7, 2023No Comments

Washington, D.C. – Drug company giant Merck sued the federal government yesterday to try and stop Medicare from negotiating lower prescription drug prices, a key part of the recently approved Inflation Reduction Act. Merck manufactures Januvia, an expensive type 2 diabetes drug that is likely to be eligible for negotiation, and has been on the market without competition for nearly 20 years. The authority to negotiate lower prices against Big Pharma, making prescription drugs more affordable for millions of seniors, is a historic win for American patients who pay up to four times more for the same drugs as patients in other wealthy countries. President Biden and Democrats in Congress delivered on their promise to lower costs for American families by passing the Inflation Reduction Act, and now seniors are depending on those savings while Big Pharma is desperately trying to protect their profits.

Members of Congress

Senator Patty Murray (D-WA): Big Pharma Continues Protecting Profits At The Expense of Patients’ Health. “This lawsuit could prevent millions of Americans on Medicare from benefiting from lower prescription drug prices. People are sick and tired of big pharma protecting their profits at the expense of patients’ health.” [Twitter, 6/6/23]

Senator Ron Wyden (D-OR): “No Surprise” Big Pharma Wants To Stop Medicare From Negotiating Lower Drug Prices. “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.” [Washington Post, 6/6/23]

Senator Bernie Sanders (I-VT): Merck Wants To Keep U.S. Drug Prices High. “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.” [Twitter, 6/6/23]

Senator Sherrod Brown (D-OH): Big Pharma Will Stop At Nothing To Raise Prices. “For years we fought Big Pharma to allow Medicare to negotiate lower drug prices. Last year, we won. But of course these corporations never give up. Big Pharma will stop at nothing to raise prices on Ohio seniors.” [Twitter, 6/6/23]

Rep. Frank Pallone Jr. (D-NJ): Merck’s “Outrageous” Lawsuit Seeks To Block Medicare Price Negotiation & Rip-Off The American People.“This lawsuit is outrageous. Empowering Medicare to negotiate fair prescription drug prices for seniors is not only plainly constitutional, but it’s also necessary if life-saving drugs are to continue to be available to all Americans. People just can’t afford their medications and increasingly go without them. The only rights that are being violated here are those of the American people who have been getting ripped off by Big Pharma companies like Merck for years. Thankfully, Big Pharma’s ability to extort seniors on drug prices is coming to an end. I’m incredibly proud of our work to stand up for consumers by passing drug price negotiation and I’m confident the law will withstand this ridiculous lawsuit by Merck.” [Energy and Commerce Committee Ranking Member Frank Pallone, Jr. Press Release, 6/6/23]

Rep. Adam Schiff (D-CA): Merck’s Lawsuit Is “Profit Over Patients.” “Corporate greed threatens seniors’ access to affordable medications. Merck’s lawsuit against Medicare drug price negotiation is an egregious prioritization of profit over patients. We must safeguard the needs of our people, not Big Pharma’s bottom line.” [Twitter, 6/6/23]

Rep. Pramila Jayapal (D-WA): Merck Wants To Force Patients To Pay More. “Merck claims that the fair price negotiation provisions Democrats passed last year will prevent development of new drugs, so they’re suing to block them & force patients to pay more. Yet big pharma spent $577B on stock buybacks & dividends from 2016-2020. Make it make sense.” [Twitter, 6/6/23]


Washington Post: Several Legal Experts Are “Skeptical” Of Merck’s “Pretty Weak” Lawsuit. “Some legal analysts say to expect more lawsuits from drugmakers who allege the policy will thwart the development of innovative new therapies. And several said they’re skeptical [of] the lawsuit, which Merck vowed to take all the way to the Supreme Court if needed, will survive. But the move has strategic merit for the company, even though the case is ‘pretty weak,’ said Ameet Sarpatwari, an assistant professor of medicine at Harvard Medical School.” [The Washington Post, 6/7/23]

Bloomberg (Opinion): “Merck’s Lawsuit Against Drug Price Controls Is Doomed.” “The pharmaceutical company says provisions in the Inflation Reduction Act violate the Constitution, but no judge is likely to agree. Merck’s lawsuit seeking to prevent enforcement of the drug pricing provisions adopted last year as part of the Inflation Reduction Act makes lots of good arguments against the legislation. But despite oodles of colorful language, the complaint doesn’t seem likely to win the company the injunction it’s hoping for.” [Bloomberg (Opinion), 6/7/23]

Truthout: Merck’s Lawsuit Comes Even As The Government Has “Already” Been Allowed To Negotiate Drug Prices “For Decades.” “Crucially, this is one of the only recent steps taken by lawmakers to lower prescription drugs at the federal level. Prescription drugs cost more in the U.S. than anywhere else in the world, due in large part to the pharmaceutical industry’s strong grip over lawmakers. This is a major factor in U.S. residents having worse health outcomes than residents of any other wealthy country. The government is already allowed to negotiate drug prices. For decades, the Department of Veterans Affairs has negotiated drug prices with manufacturers, allowing the agency to pay roughly half the amount for certain top drugs than Medicare does. Merck has garnered sharp criticism for the lawsuit, which critics said is motivated by a desire to profit off the health and survival of Americans. Indeed, records show that Merck’s revenue grew a whopping 22 percent in 2022.” [Truthout, 6/6/23

The Pharma Letter: Merck’s Lawsuit Has “Mixed Prospects.” “The judicial response to industry lawsuits on drug pricing regulations have been mixed in the past. Previously, the Pharmaceutical Research and Manufacturers of America (PhRMA) brought a similar claim on First Amendment grounds against California, alleging that requirements for public notification and explanation of drug price increases violated free expression. However, the US District Judge sided with the state and dismissed the lawsuit. Should the judge in this case take a similar approach – which is not guaranteed, given that District Court judgements are not binding precedent – the First Amendment claim is likely to fail.” [The Pharma Letter, 6/7/23]

Physicians and Health Care Experts

​​Zachary Baron and Andrew Twinamatsiko, associate directors of the O’Neill Institute for National and Global Health Law at the Georgetown University Law Center:  “That lawsuits are ultimately brought says nothing about any actual legal infirmity with the IRA or the Medicare Drug Negotiation program. In fact, as discussed briefly below, a number of the potential claims that the pharmaceutical industry and their allies may pursue largely track other unsuccessful industry challenges and would likely face substantial legal headwinds. If successful, such lawsuits would have broader implications beyond just Medicare or prescription drugs. Rather, the success of these challenges could result in new legal doctrines that would severely restrict federal regulatory authority in the health care arena.” [Health Affairs Forefront, 6/7/23]

Nicholas Bagley, Professor at the University of Michigan School of Law: “Merck doesn’t have a constitutional right to sell its drugs to the government at the price that it sets. That’d be nuts. […] both of these claims look very, very weak. […] That’s not an unconstitutional condition. That’s just bargaining.” [Twitter (Thread), 6/6/23]

Ameet Sarpatwari, Assistant Professor of Medicine at Harvard Medical School:  “What Merck argues is ‘coercion’ is actually the establishment of a freer, more rational marketplace [that will address a crucial root cause of high drug prices].” [New York Times, 6/6/23]

Erik Gordon, Clinical Professor at the University of Michigan’s Ross School of Business: “[There are] better odds that Elizabeth Holmes wins Medtech Innovator of the Year than that Merck wins its lawsuit.” [STAT, 6/6/23]

Jonathan Reiner, Professor Of Medicine & Surgery at the George Washington University School of Medicine & Health Services: “Merck made $14.5 billion in profits last year.” [Twitter, 6/7/23]

Health Care Organizations and Advocates

Bill Sweeney, Senior Vice President at AARP: “Seniors and taxpayers are tired of being the piggy bank for the profits of big drug companies. Lawsuits like this are simply an attempt to keep high profits by gouging America’s seniors.” [CNBC, 6/6/23]

Tricia Neuman, Senior Vice President at the Kaiser Family Foundation: “It’s no surprise that drug companies have been gearing up to challenge #Medicare price negotiations in the courts, but a little surprising to see a lawsuit before CMS announces the names of the 10 drugs included on the list.” [Twitter, 6/6/23]

Robert Weissman, President of Public Citizen: “Merck is claiming the U.S. Constitution requires the U.S. government and people to be suckers. That’s not true. This lawsuit is a desperate attempt by the industry to beat back popular legislation that would curtail Big Pharma’s ability to price gouge Medicare and secure monopoly profits. Full stop. While Big Pharma’s litigation gambit plays out, it is critical that the federal government continue its preparation for price negotiations. Delay in the commencement of long-overdue negotiations will result in billions of dollars in excess costs for taxpayers and consumers” [Public Citizen Press Release, 6/6/23]

David Mitchell, Founder of Patients For Affordable Drugs Now: “Merck’s bogus lawsuit bemoans Medicare’s negotiation authority as ‘tantamount to extortion’ – but 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. […] We believe that courts will see Merck’s lawsuit for what it is: a meritless attempt to maintain its ability to unilaterally set prices that are untethered to quality at the expense of patients. The truth is, implementation of Medicare negotiation is a desperately needed, long-awaited rebalancing of our drug price system that will help millions of patients obtain the medications they need at prices they can afford while ensuring continued innovation.” [Patients For Affordable Drugs Now Press Release, 6/6/23]

Margarida Jorge, Head of Lower Drug Prices Now: “This is nothing but a political stunt motivated by the same shameless greed that we’re used to seeing from drug corporations that have made decades of inflated profits at the expense of patients’ health and taxpayers’ hard-earned money. […] It’s time for big drug corporations like Merck to give up their monopoly control over prices and negotiate fair prices for the medicines we need.” [Lower Drug Prices Now Press Release, 6/6/23]

Max Richtman, President & CEO of the National Committee to Preserve Social Security and Medicare: “Merck’s decision to sue the federal government today demonstrates that there is no bottom to Big Pharma’s greed and the corporate culture of putting profits before people. With its lawsuit, Merck has made it clear that one of the nation’s most profitable drugmakers wants seniors to continue paying sky-high prices for their vital medications. (Merck made $14.5 billion in profits last year.) […] Merck’s constitutional arguments are spurious at best; the Veterans Administration has been successfully negotiating prices with Big Pharma for years. Drugmakers can still remain profitable while abiding by the Inflation Reduction Act, which was a long-awaited and landmark piece of legislation to protect seniors from industry price gouging.” [National Committee to Preserve Social Security and Medicare Press Release, 6/6/23]

Richard Fiesta, Executive Director of the Alliance for Retired Americans: “Merck’s ridiculous lawsuit is the equivalent of a toddler throwing a temper tantrum. 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.” [The Alliance for Retired Americans Press Release, 6/6/23]