Merck is intensifying its fight against the drug price negotiation provisions in the Inflation Reduction Act (IRA) by requesting a decision without a trial in federal court in Washington, DC
Merck reasserted its previous claim that the drug price negotiation program infringes upon the First and Fifth Amendments of the Constitution. The IRA mandates the federal government to negotiate prices on certain drugs starting in 2026 and imposes penalties for price increases that exceed inflation.
In its earlier filing, Merck criticized the system as “extortion” and argued that it violates the First Amendment by compelling companies to declare their prices as fair.
“Conscripting companies to conceal unpopular price-setting is exactly the parroted orthodoxy that the First Amendment’s compelled-speech doctrine is meant to forbid,” Merck wrote in its lawsuit. “If the Government wants to justify turning American drug innovators into the equivalent of public utilities, it must do so using its own voice, not by forcing the industry to feign agreement.”
Merck argues that the measure would allow the government to set prices for its drugs, including the blockbuster drug Keytruda by 2028, rather than engaging in actual negotiations.
In response to Merck’s initial lawsuit, Christen Linke Young, deputy assistant to the president for health and human affairs, stated that there is no constitutional barrier preventing Medicare from negotiating lower drug prices.
Following Merck’s lawsuit, Bristol Myers Squibb, the US Chamber of Commerce, and the pharmaceutical industry association PhRMA also filed their own legal challenges.
PhRMA’s lawsuit additionally argues that Medicare negotiations would violate the Eighth Amendment’s prohibition of excessive fines. They contend that the law imposes taxes that escalate from 186% to a maximum of 1,900% of a drug’s annual revenue for noncompliance, which constitutes a penalty grossly disproportionate to the offense.
In Merck’s motion for a decision without a trial, they cite the penalty that would apply to their diabetes treatment Januvia, which would be subject to price negotiation in the initial round in 2026.
“For Januvia, that would amount to a penalty of tens of millions of dollars on the very first day of Merck’s refusal to enter a ‘manufacturer agreement,’ soon escalating to hundreds of millions of dollars per day.”
– Merck
