- cross-posted to:
- news
- cross-posted to:
- news
Johnson & Johnson sued the Biden administration over Medicare’s new powers to slash drug prices, making it the third pharmaceutical company to challenge the controversial provision of the Inflation Reduction Act.
Reading a bit more into this, it may be that the pharma companies have a case, even if the optics are terrible. The drug negotiation process in the IRA seems to be unlike how other countries do negotiations (which the pharma companies are of course familiar with).
In the UK, for example, a government board looks at each new drug, bargains over pricing with the pharma company, and evaluates if the benefits are worth the cost. If they can’t come to an agreement, the government just walks away and goes without the drug (it does this regularly, so it’s not just an idle threat). The government can also get leverage, in some instances, by playing off pharma compabies against each other if they provide similar offerings. This is much like how ordinary individuals or companies make agreements and do business with each other.
In the US law, it looks like the government has put in a bunch of coercive measures, whereby if a pharma company does not provide a price that the government is fair, then the government can compel it to reset the price and impose a bunch of penalties for noncompliance. That’s what the lawsuits are about. I’m not sure why the law authorising Medicare drug price negotiations added these extra coercive elements, instead of simply, well, authorising Medicare to negotiate for drug prices. If the law gets struck down because of this, it would be a dismal example of legislative overshoot.
If my reading of the situation is wrong, feel free to correct.
I think it’s more along the lines of profiteering, these drug companies are charging insane prices for drugs and a lot of the drugs are life saving drugs. The government isn’t gonna tell them they can’t make money off the drug but tell them if a pill costs .001 cent to make and the government funded the research to make the pill you can’t charge 6000 a pill
The rejoinder is that other countries manage not to get ripped off. The US was previously (stupidly) banned from negotiating drug prices, but now that it can negotiate in earnest like other countries, why shouldn’t it get at least as good a deal as other countries, simply by negotiating normally? If anything, the sheer size of Medicare should mean that it can get better deals. So why put in these excess measures that invite legal challenge? It seems strange to me.
no idea but that’s neat, I had no clue that’s how it worked in the UK