US Chamber of Commerce sues over government's drug pricing power
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[June 10, 2023]
By Jonathan Stempel
(Reuters) -The U.S. Chamber of Commerce on Friday sued the federal
government, challenging a new law that for the first time gives Medicare
the power to negotiate drug prices with pharmaceutical companies.
In a complaint filed in federal court in Dayton, Ohio, the chamber said
the pricing program violated drugmakers' due process rights under the
U.S. Constitution by giving the government "unfettered discretion" to
dictate maximum prices.
It also said the program would impose exorbitant penalties on drugmakers
that don't accept those prices, and amounted to an ultimatum: "agree to
whatever price the government names, or we'll smash up your business."
The U.S. Department of Health and Human Services administers Medicare
through its Centers for Medicare & Medicaid Services.
A spokeswoman said the agency will vigorously defend the program, which
is already helping lower healthcare costs for older adults and people
with disabilities. "The law is on our side," she added.
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Friday's lawsuit by the chamber, one of the most powerful U.S. business
groups, came three days after Merck & Co filed a similar lawsuit in
Washington, D.C.
Both lawsuits contended that price controls would force drugmakers to
pull back on developing new drugs, causing long-term harm to Americans
and their health.
Other drugmakers have also objected to the pricing program, which is
part of last year's Inflation Reduction Act. Pricing changes following
negotiations on 10 costly drugs selected by CMS would take effect in
2026.
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The United States Chamber of Commerce
building is seen in Washington, D.C., U.S., May 10, 2021.
REUTERS/Andrew Kelly/File Photo
![](http://archives.lincolndailynews.com/2023/Jun/10/images/ads/current/peasleymemorials_lda_2022.png) Americans pay more for prescription
drugs than prices in any other country.
The Biden administration hopes to save $25 billion annually by 2031
by having Medicare, the government health plan for people 65 and
over, negotiate prices.
White House spokeswoman Karine Jean-Pierre said on Tuesday the
government was confident it would win the Merck case.
"There is nothing in the Constitution that prevents Medicare from
negotiating lower drug prices," she said.
The chamber also warned that allowing the pricing program would set
a bad precedent.
"After all, if the government can impose price controls in the
pharmaceutical industry, why not elsewhere?" Chief Policy Officer
Neil Bradley said in a statement.
The case is Dayton Area Chamber of Commerce et al v Becerra et al,
U.S. District Court, Southern District of Ohio, No. 23-00156.
(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot)
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