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Drugmaker Merck Sues U.S. for Drug Negotiation, Claims ‘Extortion’

Merck is the first pharmaceutical company to challenge the Inflation Reduction Act.

Pharmaceutical company Merck & Co sued the U.S. government Tuesday, arguing that the drug price negotiation program in the Inflation Reduction Act violates the constitution. The 28-page complaint likens Medicare’s price negotiations to “political Kabuki theater” that’s “tantamount to extortion,” and claims that under the act, drugmakers like them would be forced to negotiate drug prices to the government at below market rates. Merck alleges that this is a violation of the Fifth Amendment, which requires the government to pay “just compensation” for property taken for public use. Additionally, the company argues that drugmakers would be forced to sign agreements that state the negotiated prices are fair, claiming that to be a violation of free speech in the First Amendment. Merck is the first pharmaceutical company to challenge the law, which is aimed lowering drug prices for Medicare.