
[Photocreo Bednarek/Adobe Stock]
The legislation has put pricing pressure on the industry and contributed to a wave of recent M&A deals.
Merck, and the wider pharmaceutical industry, are raising the alarm. They claim the law, in effect, coerces drugmakers into accepting below-market rates. The lobbying group PhRMA (Merck is a member) released a statement in April 2023 arguing that the Inflation Reduction Act threatens patient access and complicates R&D efforts. In addition, PhRMA accused CMS of not complying with legal requirements by providing only 30 days for commenting on the complex pricing program.
Merck’s litigation follows the Biden administration’s drug pricing reform, poised to shave some $25 billion annually off Medicare’s drug costs by 2031. Prescription medicine costs in the U.S. are the highest globally. For its part, Merck is framing the negotiation talks as ‘coercive,’ even amounting to ‘extortion.’ Merck also argues the negotiations violate their First Amendment rights, curtailing their free speech.
We have contacted the Centers for Medicare & Medicaid Services (CMS) to request an official statement regarding Merck’s lawsuit and the potential impact on the Inflation Reduction Act.
Below, we offer the timeline below to capture the events leading up to the lawsuit:
Timeline
Merck sues the U.S. government
Biden announces National Cancer Plan
Government releases its roadmap for price negotiations
The Inflation Reduction Act is passed
PhRMA board members express concerns over Inflation Reduction Act
Biden announces Prescription Drug Pricing Plan
CMS moves to rescind the Most Favored Nation Model interim final rule
The American Rescue Plan Act signed into law
Filed Under: Drug Discovery, Drug Discovery and Development
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