"The IRA requires drugmakers to sell selected patented drugs to the government for its Medicare Parts B & D programs at a stipulated "maximum fair price". If they don't agree to these prices, then they face tax penalties on sales of the drug exceeding their profits from it, or the exclusion of all their drugs from Medicare and Medicaid purchases. This would foreclose access to up to 160 million patients, accounting for around 40% of US prescription drug spending or 20% of global prescription drug spending."
"Bristol Myers Squibb (BMS) and Janssen Pharmaceuticals argued that (1) the IRA constitutes an uncompensated taking of their property at below-market rates in violation of the Fifth Amendment, (2) that it compels speech in violation of the First Amendment through requiring them to sign an agreement that they "negotiated" a "maximum fair price" for their drugs, and (3) that it imposes unconstitutional conditions on their participation in the program."
A U.S. Court of Appeals for the Third Circuit upheld the IRA's drug price negotiation program, and the ruling has been appealed to the U.S. Supreme Court. The IRA requires drugmakers to sell selected patented drugs to the government for Medicare Parts B and D at a stipulated "maximum fair price", with tax penalties or exclusion from Medicare and Medicaid for noncompliance. Government purchases total about $200 billion annually and could foreclose access to up to 160 million patients, roughly 40% of U.S. prescription drug spending and 20% globally. Bristol Myers Squibb and Janssen alleged Fifth and First Amendment violations and unconstitutional conditions, but the appeals court rejected those claims and found drugmakers could choose to forego government purchases. The decision permits the government to combine regulatory and market power to depress private intellectual property values to secure lower prices for taxpayers.
Read at IPWatchdog.com | Patents & Intellectual Property Law
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