Merck is bringing more heat in its battle against drug price negotiation provisions in the Inflation Reduction Act (IRA), filing Tuesday in federal court in Washington, D.C. for a decision without a trial.
In its request for summary judgment in its case against the U.S. Department of Health & Human Services and the Centers for Medicare and Medicaid Services (CMS), Merck reiterated its claim from five weeks ago that the drug price negotiation program violates the First and Fifth Amendments of the Constitution.
Under the IRA, the federal government is set to begin negotiating prices on certain drugs in 2026. The new law also enables the government to dish out penalties for price hikes that outpace inflation.
In its previous filing, Merck called the system “extortion.” The system violates the First Amendment by forcing companies to say that prices are fair, according to the company.
“Conscripting companies to conceal unpopular price-setting is exactly the parroted orthodoxy that that the First Amendment’s compelled-speech doctrine is meant to forbid,” Merck wrote in its lawsuit. “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.”
Merck claims that prices of its drugs that would be affected by the measure—including mega-blockbuster Keytruda in 2028—would be set by the government as opposed to being “negotiated.”
In response to the initial Merck lawsuit, Christen Linke Young, deputy assistant to the president for health and human affairs, told reporters on a conference call that there is “nothing in the Constitution that prevents Medicare from negotiating lower drug prices.”
After Merck filed its suit last month, Bristol Myers Squibb did the same, followed by filings from the U.S. Chamber of Commerce and industry association PhRMA.
In the lawsuit from PhRMA, there is an additional claim that Medicare negotiations would violate the Eighth Amendment of the Constitution against excessive fines.
The new law forces a tax that starts at 186% of a drug’s annual revenue and increases to a maximum of 1,900% for noncompliance, essentially functioning “as a penalty that is grossly disproportionate to the ‘offense’ it seeks to punish,” the groups argued in their suit.
In its motion for a decision without a trial, Merck cites the penalty that would apply to its diabetes treatment Januvia, which would be subject to price negotiation in the opening round in 2026.
“For Januvia, that would amount to a penalty of tens of millions of dollars on the very first day of Merck’s refusal to enter a ‘manufacturer agreement,’ soon escalating to hundreds of millions of dollars per day,” the company wrote.