Bristol Myers Squibb Co (BMY.N) filed a lawsuit against the US government on Friday, alleging that the Medicare drug price negotiation plan program violates the Fifth and First Amendments of the US Constitution and will likely affect one of its best-selling medications.
The pharmaceutical industry claims that the rule, which is a component of President Joe Biden’s signature Inflation Reduction Act (IRA), will reduce revenues and force companies to put off creating ground-breaking new therapies.
Medicare Negotiation Plan Prices for Costly Medications
This is the third lawsuit to date that has been filed in opposition to the bill.
Last week, the US Chamber of Commerce and pharmaceutical company Merck & Co MRK.N sued the government over the proposed price reductions. More than any other nation, Americans pay more for prescription drugs.
By having Medicare, the government health plan for those 65 and older, negotiate costs for some of its priciest medications, the Joe Biden administration wants to save $25 billion yearly by 2031.
Data from the organization in charge of managing Medicare and Medicaid show that the blood thinner Eliquis, which Bristol Myers shares with Pfizer (PFE.N), cost the US government more than $12.57 billion in 2021.
Analysts anticipate that it will be one of the 10 medications that were initially chosen in September for negotiating rates that would go into force in 2026.
Read more: Medicare Price Negotiations: Drugmakers Fight Back, What You Need To Know
Bristol Myers Claims Violation of Fifth Amendment Rights
The Bristol Myers complaint claims that the price negotiation will force pharmaceutical companies to sell their products to Medicare at steep discounts and below market prices.
The business claims that this goes against the Fifth Amendment, which demands that the government compensate owners of private property that is acquired for public purpose.
Bristol Myers contends that even when it is not, the law compels manufacturers to publicly claim that the government’s price-setting process is a genuine negotiation that yields a fair price.
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