'No Surprise': Big Pharma Sues Biden Over Effort to Lower Drug Prices for Americans

Aiming to protect wealthy pharmaceutical companies from any reduction in their tens of billions of dollars in annual profits or lavish CEO compensation packages, the industry's biggest lobbying group on Wednesday announced a lawsuit against the Biden administration over its policy allowing Medicare to negotiate lower drug prices for consumers.

Part of the Inflation Reduction Act that was passed last year, the Medicare negotiation provision has been a key demand of progressives including Sen. Bernie Sanders (I-Vt.) for several years, as the United States pays more per person for prescribed drugs than any other country and nearly a third of Americans said in one survey last year that they have avoided taking medications due to costs.

Although a Congressional Budget Office analysis found last year that allowing Medicare to negotiate lower drug prices would save the U.S. nearly $290 billion in new revenue and savings over a decade, the Pharmaceutical Research and Manufacturers of America (PhRMA) on Wednesday became the latest pro-industry group to sue over the provision, arguing the law is unconstitutional.

PhRMA argued in a court filing in the Western District of Texas that the provision violates the constitutional requirement for checks and balances by placing too much authority in the hands of the U.S. Department of Health and Human Services (HHS), the due process clause by denying drug companies input regarding pricing, and the Eighth Amendment's ban on "excessive" fines due to the excise tax Big Pharma companies will be required to pay if they refuse to negotiate.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) said it was "no surprise" that pharmaceutical companies want to stop Medicare from saving millions of senior citizens out-of-pocket costs—and warned that they'll likely be successful if a Republican candidate wins the presidency in 2024.

"I expect the Biden administration to vigorously defend Medicare's bargaining power so seniors will see the lower drug prices they expect," said Wyden. "This legal action underscores how critical it is to have a president in the White House who will fight for lower health costs for Americans. I have deep concerns that a Republican administration would roll out the red carpet for Big Pharma and once again ban Medicare from negotiating lower drug prices."

PhRMA was joined by the National Infusion Center Association and the Global Colon Cancer Association in the legal challenge, which follows a lawsuit filed by drugmaker Merck earlier this month. The U.S. Chamber of Commerce and Bristol Myers Squibb have also sued over the provision this month, with the latter claiming, as PhRMA did Wednesday, that the law is "bad for innovation."

"We remain very concerned about the impact this law will have on patients and future innovation," PhRMA CEO Steve Ubl said.

The economic justice campaign Unrig Our Economy said Big Pharma is fighting any provision to help Medicare beneficiaries "while hardworking families struggle to pay for lifesaving medicine."

PhRMA is seeking a permanent injunction to stop the negotiation process, three months before the government is scheduled to choose the first 10 drugs to which the provision will apply. The new prices are set to take effect in 2026.

"We will vigorously defend the president's drug price negotiation law, which is already helping to lower healthcare costs for seniors and people with disabilities," a spokesperson for HHS told The Hill. "The law is on our side."