Bristol Myers Squibb has become the third company to file a lawsuit against the Biden administration over Medicare’s new powers to negotiate drug prices. The lawsuit was filed in federal district court in New Jersey with the argument that the Medicare negotiations violate the First and Fifth Amendments of the U.S. Constitution. Bristol Myers Squibb is requesting the court to declare the program unconstitutional and prevent the Health and Human Services Department from forcing the company to enter negotiations.
The Inflation Reduction Act
In 2022, the Inflation Reduction Act was passed in a narrow party-line vote. It empowered Medicare to negotiate drug prices for the first time in the program’s six-decade history. The law is the central pillar of the Biden administration’s efforts to control rising drug prices and was a major victory for the Democratic Party. Bristol Myers Squibb argues that the federal government is forcing the company to enter negotiations and eventually agree to a heavily discounted price.
The Company’s Arguments
Bristol Myers Squibb’s arguments mirror those lodged last week by Merck, the first company to sue the federal government over the drug negotiations. The U.S. Chamber of Commerce has also sued HHS over the program with similar arguments. Bristol Myers Squibb said that its blood thinner Eliquis, used to treat clots and strokes, will be subject to the negotiations this year. The company generated $11.8 billion in revenue from Eliquis last year, about 25% of the company’s $46 billion in total revenue for 2022. The drugmaker also said Opdivo, used to treat several types of cancer, will be subject to the Medicare negotiations in the future. Opdivo generated $8.2 billion in sales for the company in 2022, which made up about 18% of the drugmaker’s total revenue for that year.
The drugmaker claimed HHS is forcing the company to publicly present the program as a negotiation over a fair price. The company called the negotiations a sham and claimed the federal government is forcing the drugmaker to “parrot its preferred political messaging” in violation of the First Amendment. The company claims this violates Fifth Amendment protections against the government seizing private property without just compensation.
In response to Merck’s lawsuit, HHS Secretary Xavier Becerra vowed to vigorously defend the Inflation Reduction Act in court, saying, “The law is on our side.” White House Press Secretary Karine Jean-Pierre also stated that the Biden administration is confident it will win in court. “There is nothing in the Constitution that prevents Medicare from negotiating lower drug prices,” Jean-Pierre said.
Bristol Myers Squibb has sued the Biden administration over Medicare’s new powers to negotiate drug prices. The company argues that the negotiations violate the First and Fifth Amendments of the U.S. Constitution and is requesting the court to declare the program unconstitutional and prevent the Health and Human Services Department from forcing the company to enter negotiations. The Inflation Reduction Act is the central pillar of the Biden administration’s efforts to control rising drug prices and was a major victory for the Democratic Party.