Leading Healthcare Experts Oppose Lawsuit Challenging Medicare’s Drug Price Negotiation Program

A group of nine nationally recognized experts in healthcare, healthcare finance, and Medicare represented by Zuckerman Spaeder have filed an amicus brief opposing Merck’s legal challenge to the recently enacted federal Drug Price Negotiation Program (DPNP). A provision of the Inflation Reduction Act, the DPNP authorizes the federal government to negotiate prices paid by Medicare for certain prescription drugs. The brief explains that the lawsuit is entirely without merit and that, over the past 40 years, “the courts have uniformly rejected” similar challenges to the government’s regulatory authority. Amici also explain that the DPNP is a crucial first step to managing prescription drug costs for the program and taxpayers, which “is essential to the financial stability of the Medicare program.”

As Amici explain, over the past 50 years, Congress has given the Department of Health and Human Services (HHS) authority to manage the costs of Medicare healthcare services, and prescription drugs “are the only major component of Medicare that have not been subject to meaningful cost controls.” As a result, the Medicare program has been left “with no leverage over excessive drug prices, which must be borne by Medicare’s beneficiaries and taxpayers.” To begin to address skyrocketing drug costs, “the DPNP finally puts some drug manufacturers in a position similar to that faced by Medicare participating providers and physicians.” The brief also explains that other federal agencies have authority to negotiate and control prescription drug costs.

In June, Merck sued the federal government, claiming that the DPNP represents an illegal taking of property under the Fifth Amendment and compels the speech of drug manufacturers in violation of the First Amendment. However, Merck’s challenge “seeks to relitigate positions repeatedly rejected by courts in response to other challenges brought against federal healthcare programs.” In fact, the government has well-established authority to manage costs of services paid for by federal healthcare programs. And despite numerous constitutional challenges brought by regulated parties, “not one of those claims has succeeded.” 

The brief was submitted by the following experts:

• Stuart Altman, PhD: former Chair of the Prospective Payment Assessment Commission; former Deputy Assistant Secretary at the Department of Health Education and Welfare
• Robert A. Berenson, MD: former Director of Health Plans and Providers at the Health Care Financing Administration; former Vice Chair of MedPAC
• Donald Berwick, MD: former Administrator of the Centers for Medicare & Medicaid Services; former President and CEO of the Institute for Healthcare Improvement
• David Blumenthal, MD: former National Coordinator for Health Information Technology; former President of the Commonwealth Fund
• Francis J. Crosson, MD: former Chair of MedPAC; former member of the National Advisory Committee of the Agency for Healthcare Research and Quality
• Paul Ginsburg, PhD: former Executive Director at the Physician Payment Review Commission (MedPAC predecessor); former Deputy Assistant Director of the Congressional Budget Office
• Marilyn Moon, PhD: former Public Trustee for the Social Security and Medicare Trust Funds; former Chair of the Maryland Health Care Commission
• Robert D. Reischauer, PhD: President Emeritus of the Urban Institute; former Director of the Congressional Budget Office; former Public Trustee of Social Security and Medicare Trust Funds, former Vice Chair of MedPAC
• Bruce Vladeck, PhD: former Administrator of the Health Care Financing Administration; former member of the National Bipartisan Commission on the Future of Medicare

The amicus brief was prepared by Zuckerman Spaeder partners William B. Schultz, who previously served as General Counsel at HHS and Deputy Commissioner for Policy at the Food and Drug Administration, and Margaret "Peggy" Dotzel, who previously served as Acting General Counsel and Deputy General Counsel at HHS, along with associate Alyssa M. Howard. 

The lawsuit is Merck & Co., Inc. v. Xavier Becerra, 1:23-cv-01615.