We may earn commissions if you use the recommended services on this site.  

At Supreme Court, Drugmakers Target Medicare Drug-Price Bargaining," is a new title

Latest Business News

At Supreme Court, Drugmakers Target Medicare Drug-Price Bargaining," is a new title

Pharmaceutical companies such as Merck, AbbVie, Bristol Myers Squibb, and others are filing lawsuits to stop Medicare from reducing drug prices for seniors. The Inflation Reduction Act allows Medicare to negotiate for drug prices for the first time, which is considered a major revenue threat to pharmaceutical companies. However, the companies argue that the program is unconstitutional under the First and Fifth amendments based on their claim that Medicare is taking away their private property, which are their patented drugs. Legal experts predict that the lawsuits will be a long fight that could end up in the Supreme Court.

Merck, Bristol Myers Squibb, and the chamber filed their lawsuits before deadlines, such as the publication of the 10 drugs that Medicare selected for the negotiations and entering into agreements to participate in the negotiations. The lawsuits might cause significant financial penalties when they face severe taxes if they do not comply with the program, which will have a higher daily revenue cost for them. If Medicare pushes through the negotiations, it could reduce drug prices' actual cost by January 2026. The pharmaceutical companies may sue again when HHS publishes the list of drugs subject to negotiation in September.

The companies filing lawsuits argue that the government's involvement in the drug prices will stifle future drug development in the US. However, legal experts predict that the success or failure of the lawsuits would depend on the courts' decision on whether patents are a form of private property that Medicare is infringing on. According to Robin Feldman, an intellectual property and health law expert, patents differ substantially from land, and their value is derived from government-issued patents. Applying the takings clause to patents would shift the balance of power significantly.

Despite the pharmaceutical industry's efforts, the Biden administration is confident that the drug-price negotiation law is lawful under the Constitution. Medicare has long fought for the ability to negotiate drug prices to benefit the seniors and people with disabilities. The success of the lawsuits determines whether Medicare can negotiate and reduce drug prices for the first time in the program's long history.
The ongoing legal battles between Medicare and pharmaceutical companies have far-reaching implications that can affect new businesses in various ways. With Medicare's ability to negotiate prices now under threat, new businesses entering the pharmaceutical market could find the pricing environment less competitive if Medicare negotiations fall through. Additionally, if the drug pricing negotiation law is upheld by the courts, new businesses in the pharmaceutical sector could find it challenging to bring profitable drugs into the market due to lower drug prices.

Furthermore, the litigation and legislative battles between Medicare and pharmaceutical companies may create an atmosphere of uncertainty for new businesses attempting to develop innovative drugs or therapies. The potential for regulation or litigation can create difficulty attracting investors and securing funding for new ventures.

Overall, the outcome of these legal battles could shape the future of the pharmaceutical industry and have potential implications for new businesses attempting to penetrate the market. It is likely to remain a highly contentious topic in the industry for years to come.

LLC Filing & Registered Agent Services

Compare Online LLC Filing Services Today

We work with the market leaders in business formation and registered agent services.

Getting started is simple and inexpensive. Form your business today & secure your brand name before someone beats you to it! Click below to view the Top 3 Best LLC and registered agent service providers.
View Top 3 Providers Now

Filing An LLC Can Be Complicated

Streamline Your LLC Filing Online for $39

Northwest Registered Agent is the best-rated service for first time filers.

Get professional LLC formation & registered agent services for only $39 + state filing fee. This offers includes your full LLC setup, plus a private business address, lifetime support, and more.

Trusted by Millions. Save 82% Today.