Bristol Myers sues US government over Medicare drug price negotiation plan

[June 17, 2023]  By Patrick Wingrove

(Reuters) - Bristol Myers Squibb Co on Friday sued the U.S. government in an attempt to halt the Medicare drug price negotiation program that analysts believe will involve one of its top-selling medicines, saying it violates the Fifth and First Amendments to the U.S. Constitution.

This is the third lawsuit so far challenging the law - part of President Joe Biden’s signature Inflation Reduction Act (IRA) - which the pharmaceutical industry says will curtail profits and compel them to pull back on developing groundbreaking new treatments.

U.S. drugmaker Merck & Co and the U.S. Chamber of Commerce sued the government last week over the price cutting plan.

Americans pay more for prescription medicines than 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 for some of its costliest medicines.

The blood thinner Eliquis, which Bristol Myers shares with Pfizer, cost the U.S. government more than $12.57 billion in 2021, according to data from the agency that runs Medicare and Medicaid. It is expected by analysts to be among 10 drugs initially selected in September for negotiating prices that would take effect in 2026.

The Bristol Myers lawsuit, filed in U.S. District Court for the District of New Jersey, argues that the price negotiation would force drugmakers to sell their medicines to Medicare at huge discounts, below market rates.

A sign stands outside a Bristol Myers Squibb facility in Cambridge, Massachusetts, U.S., May 20, 2021. REUTERS/Brian Snyder/File Photo

The company asserts this violates the Fifth Amendment, which requires the government to pay reasonable compensation for private property taken for public use.

"Big Pharma regularly forces Americans to pay many times what they do customers in other countries for the exact same medicines," White House Press Secretary Karine Jean-Pierre said in a statement. "We are confident we will succeed in the courts: there is nothing in the Constitution that prevents Medicare from negotiating lower drug prices.”

Bristol Myers also argues that the law forces manufacturers to publicly state that the government's “price setting” is a true negotiation that results in a fair price, even when it is not.

“Unlike a true ‘negotiation,’ this program guarantees that the government will secure the products it wants at the prices it dictates,” the drugmaker said in its suit.

The company is seeking an injunction against the price caps, saying they cause irreparable harm and do not serve the public interest.

Merck made similar arguments in its lawsuit to a Washington, D.C. federal court.

(Reporting by Patrick Wingrove in New York; Additional reporting by Nandita Bose in Washington; Editing by Bill Berkrot)

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