AARP and AARP Foundation are getting involved in a lawsuit between Merck Co. and the Department of Health and Human Services (HHS) over Medicare’s new authority to negotiate lower prescription drug prices. The groups filed an amicus brief in the matter last month. This marks the first time that the organization went after the Medicare negotiation claims.
The pharmaceutical industry has largely been vocal about its opposition to the Inflation Reduction Act, which will let Medicare negotiate the prices of top-selling pharmaceuticals. AARP states that eliminating the negotiation power of the Act would harm older Americans.
Starting in 2026, the Act will let Medicare negotiate prices for the most costly prescription medications. Last month, CMS identified the first 10 prescription drugs that it would negotiate under the Medicare Drug Price Negotiation Program that’s aimed at reducing prescription drug costs.
“Now that the law allows Medicare to negotiate lower drug prices, the public and the Medicare program can evaluate whether the exorbitant prices are justified,” William Alvarado Rivera, senior vice president for litigation at AARP Foundation, said in a statement. “Drug companies like Merck are scrambling to keep the special treatment that allowed them to charge whatever price they wanted at the expense of older people’s health and financial stability. We cannot let skyrocketing prices stop millions of older adults from accessing affordable medications for chronic conditions. The industry claims that Medicare negotiation will stifle innovation, but evidence shows that the law will support research and development while also saving billions of dollars for seniors, taxpayers, and Medicare. For the sake of protecting Americans’ lives, the law must be upheld.”
In June, Merck and Co. sued the HHS for what it says are violations of the First and Fifth Amendments to the U.S. Constitution. Merck says the Act goes against the Fifth Amendment, which requires the government to compensate companies or individuals for property used for the public good. It would force companies into contracts they wouldn’t have otherwise gone into, Merck claims — something they say violates the First Amendment, Reuters reported.
Januvia accounted for $21.6 billion in Medicare Part D spending between 2017 and May 2023. the list price for the drug has gone up 275% since it came on the market in 2006, according to an AARP spokesperson.
Long-term care pharmacies are concerned that they may pay the price of the lowered drug costs. Reduced negotiated prices could lead to significant changes in nursing home Part A contracts, higher dispensing fees and even formulary reconsiderations, Chad Worz, PharmD, BCGP, chief executive of the American Society of Consultant Pharmacists, told McKnight’s Long-Term Care News.
