Merck Files Lawsuit Against US Government

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The complaint alleges that Medicaid price controls implemented in the Inflation Reduction Act will negatively impact biopharmaceutical innovation.

Merck, known as MSD outside of the United States and Canada, announced that it had officially filed a complaint against the US government on June 6, 2023. According to a company statement, the complaint alleges that the price controls introduced by the Inflation Reduction Act (IRA), which require the Centers for Medicare and Medicaid Services to begin setting prices on small molecule medicines at nine years and large molecule medicines at 13 years, are unconstitutional and will stifle biopharmaceutical innovation.

The complaint cites the Fifth Amendment, which states that the US government must pay “just compensation” if it takes property for public use. In the statement, Merck argues that the IRA allows the government to coerce Merck to provide biopharmaceutical innovations without providing equitable value for them.

“Patients and the public need biopharmaceutical innovation to address global health challenges like cancer and Alzheimer’s disease, and the IRA is negatively affecting critical research and development,” reads the statement. “By changing the incentives and returns for some therapies and technologies over others, the IRA is changing the course of R&D, which in time will leave many patients without treatment options.”


“The Biden-Harris administration is going to fight attempts to go back to the way things were before,” said Karine Jean-Pierre, White House press secretary, in a statement to the press regarding the suit. “And so, we are confident we will succeed. There is nothing in the Constitution that prevents Medicare from negotiating lower drug prices. Anytime profits of the pharmaceutical industry are challenged, they make claims about it hindering their ability to innovate.Not only are these arguments untrue, but the American people do not buy them.”

Source: Merck, White House