Johnson & Johnson, a prominent drug manufacturer, has filed a lawsuit against the Biden Administration. They allege that certain provisions of the Inflation Reduction Act, which mandate companies to negotiate drug prices with Medicare, violate the Fifth Amendment. The company argues that these provisions enable the government to seize property without proper compensation. This legal action was taken in New Jersey federal district court. Justin Lane’s EPA-EFE photo accompanies this news.
July 18 (UPI) — Johnson & Johnson, based in New Jersey, has sued the Biden administration over the drug-pricing policies set forth by the Inflation Reduction Act. The company asserts that the Act infringes upon the Fifth Amendment as it allows for the government’s confiscation of property without just compensation.
In their statement, Johnson & Johnson explained that they have taken legal action against the Department of Health and Human Services, as well as the Centers for Medicare and Medicaid Services. They specifically challenge the drug pricing provisions of the Inflation Reduction Act, which they argue hinder innovation. The company emphasizes that patent and regulatory laws exist to protect companies that invest in and successfully develop innovative treatments.
“Today, we filed litigation against the U.S. Department of Health and Human Services as well as the Centers for Medicare and Medicaid Services to challenge the innovation-damaging drug pricing provisions of the Inflation Reduction Act (IRA),” Johnson & Johnson said in a public statement issued on Tuesday.
The provisions of the Inflation Reduction Act enable Medicare to engage in drug price negotiations with manufacturers. By September, the Centers for Medicare and Medicaid Services are expected to release a list of drugs that will be subject to negotiations. Companies whose products are included in this list will have until October to participate in the negotiations by signing agreements.
Johnson & Johnson argues that the Inflation Reduction Act forces their subsidiary company, Janssen, to provide their patented medicines at prices significantly below market rates. Failure to comply with the government-dictated terms of the Act could result in substantial penalties, reaching up to 1900% of a selected drug’s daily sales or the withdrawal of all products from both Medicare and Medicaid. This could potentially deprive nearly 40% of U.S. patients of essential medicine.
In addition to Fifth Amendment violations, Johnson & Johnson also alleges that the Inflation Reduction Act infringes upon the First Amendment. The company claims that the Act essentially forces them to agree that fair prices are being negotiated, even if they disagree.
It is worth noting that other pharmaceutical companies, such as Bristol Myers Squibb and Merck, have previously taken legal action against the Biden Administration, presenting similar arguments.
“Because this statute unlawfully impairs our core purpose of engaging in innovative research that saves and improves lives, Merck intends to litigate this matter all the way to the U.S. Supreme Court if necessary,” stated Robert Josephson, a spokesperson for Merck, in June.
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