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Johnson & Johnson on Tuesday sued the Biden administration over Medicare’s new powers to decrease drug costs, making it the third pharmaceutical firm to problem the controversial provision of the Inflation Discount Act.
The lawsuit filed in federal district courtroom in New Jersey argues that the Medicare negotiations violate the First and Fifth Amendments to the U.S. Structure.
Earlier lawsuits filed individually by Merck and Bristol Myers Squibb, in addition to the U.S. Chamber of Commerce and PhRMA, the pharmaceutical business’s largest foyer group, made comparable arguments.
J&J’s grievance asks a decide to forestall the U.S. Well being and Human Companies Division from forcing the drugmaker to take part in this system.
The lawsuit goals to finish the “innovation-damaging congressional overrun that threatens the primacy of the USA in growing transformative therapies and affected person entry to these remedies,” in line with J&J.
President Joe Biden’s Inflation Discount Act, handed in 2022 with a good get together line, allowed Medicare to barter drug costs for the primary time in this system’s six-decade historical past. The coverage goals to make medicine extra inexpensive for older People, however is more likely to scale back pharmaceutical business earnings.
The Division of Well being and Human Companies didn’t instantly reply to CNBC’s request for remark.
J&J stated its drug Xarelto, which treats blood clots and reduces stroke danger, might be topic to Medicare value negotiations in 2023.
J&J argues Medicare negotiations trigger “an uncompensated bodily consumption” of the corporate’s drug and basically pressure J&J to grant entry to Xarelto on phrases set by the federal authorities that the corporate would “by no means voluntarily conform to” .
The corporate posted $2.47 billion in income from Xarelto final yr.
This story is evolving. Test again later for updates.