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Merck battles Biden’s drug price scheme: ‘Radical central-planning’ is ‘tantamount to extortion’

Merck & Co. is digging its heels in against the Biden administration in a lawsuit over the constitutionality of HHS' drug pricing program, asking the court to rule without a trial.

FIRST ON FOX - A major American pharmaceutical company fighting the Biden administration's drug pricing scheme is digging its heels in and wants a court to rule on the case without a trial.

Merck & Co. first filed a lawsuit last month against the Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) to challenge the Drug Price Negotiation Program established last year when Congress passed the Inflation Reduction Act (IRA).

Merck says the program doesn't involve real price negotiations and forces manufacturers to either negotiate a lower price with the government or be subjected to a staggering tax.

"The Program … uses the threat of enormous monetary penalties to compel manufacturers to provide Medicare beneficiaries with 'access' to their drugs at whatever discounted price the Government, in its unreviewable discretion, selects," Merck alleged.

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"It then disguises those forced transfers as the product of a negotiated agreement, to deceive the public into thinking the manufacturers have 'agreed' that these prices are ‘fair,' and thereby to conceal the reality of the Program’s radical central-planning approach (and concomitant harms to future innovation)."

On Tuesday, the New Jersey-based company filed a motion for summary judgment that asked the court to rule on the "undisputed" fact that the program violates both the First and Fifth amendments of the Constitution.

A motion for summary judgment is a request to the court to decide on the case without a trial.

Merck says that despite the program's name and efforts by the government to say it engages in good faith negotiations with the company to lower costs for consumers, the "program involves no genuine negotiations and no voluntary agreements."

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"This is not 'negotiation.' It is tantamount to extortion," the company argued.

Merck said the program violates the takings clause of the Fifth Amendment of the Constitution because it "uses coercive sanctions to seize discounted goods for the pecuniary benefit of the Government."

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The company also argued it violates the First Amendment by forcing the company to say that prices are fair.

"[C]onscripting companies to conceal unpopular price-setting is exactly the parroted orthodoxy that the First Amendment’s compelled-speech doctrine is meant to forbid. 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," the filing said.

The White House has maintained the government will win the lawsuit and that "there is nothing in the Constitution that prevents Medicare from negotiating lower drug prices," according to White House press secretary Karine Jean-Pierre.

But legal scholar Josh Blackman at South Texas College of Law Houston says the program is "likely unconstitutional."

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"The federal government cannot force the pharmaceutical companies to 'sell' their patented drugs. This new top-down government mandate borders on extortion and is likely unconstitutional. Now, the court will have an opportunity to see if the federal government can forcibly reorder pricing in the marketplace," Blackman said.

The motion was filed in federal court in Washington, D.C.

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