Biotech
Tuesday, August 22nd, 2023 8:46 am EDT
Boehringer Ingelheim is the latest large drugmaker to challenge the U.S. government over Medicare’s new power to negotiate prices of select top-selling medicines, filing a 62-page lawsuit Friday in federal district court.
Like other pharmaceutical companies that have sued to block the drug price program, Boehringer claims it violates the U.S. Constitution and unfairly compels drugmakers to accept terms set by the government.
Merck & Co., Bristol Myers Squibb, Astellas Pharma and Johnson & Johnson have each filed separate lawsuits in various district courts, along with the powerful industry lobbying groups PhRMA and the Chamber of Commerce. Reuters first reported Boehringer’s suit Monday.
“Contrary to its name, the program does not involve genuine negotiations between drug manufacturers and the Government regarding the price Medicare will pay for prescription drugs,” Boehringer wrote in its suit, filed in U.S. District Court for the District of Connecticut. “Instead, the program compels manufacturers, on pain of astronomical fines, to provide Medicare participants with ‘access’ to their drugs at below-market rates dictated by [Medicare].”
Set up by last year’s Inflation Reduction Act, the program empowers Medicare to select a number of top-selling, single-source drugs for negotiation over their “maximum fair price.” Lower prices will first take effect in 2026 for 10 drugs with the highest gross spending through Medicare Part D, with more added in subsequent years.
If drugmakers don’t agree to the new settled price, they can either pull out of Medicare or be subject to steep fines that are many multiples of the drug in question’s revenue.
Boehringer alleges the program violates the Fifth Amendment’s guarantee of due process and protection against confiscation of property without just compensation, as well as the First Amendment’s free speech protection. Each of Boehringer’s pharma peers made similar claims in their suits.
Boehringer also claims the program runs afoul of the Eighth Amendment’s prohibition on excessive fines, an argument put forward by PhRMA and the Chamber but not by the other drugmakers.
The drugmaker suits come ahead of a Sept. 1 deadline for Medicare to publish a list of the first 10 drugs it will negotiate prices on. In its complaint, Boehringer makes clear it expects it and partner Eli Lilly’s diabetes drug Jardiance to be among the 10 selected, citing an analysis published earlier this year in the Journal of Managed Care and Specialty Pharmacy.
Other drugs identified in that analysis as likely to be selected include the diabetes medicine Januvia, made by Merck; the blood thinner Eliquis, from Pfizer and Bristol Myers; the cancer treatment Xtandi, sold by Astellas; and the blood thinner Xarelto, made by J&J.
Boehringer names the U.S. Department of Health and Human Services, the Centers for Medicare and Medicaid Services and those agencies’ respective heads as defendants. It asks the court to block them from enforcing the program against Boehringer, and to declare the process unconstitutional.
While headquartered in Germany, Boehringer operates its U.S. business out of Ridgefield, Connecticut.
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