News

Washington, DC — Today, a federal judge in Ohio denied the Chambers of Commerce’s request for a nationwide preliminary injunction in one of the cases that seeks to stop Medicare from negotiating lower drug prices for millions of seniors. This ruling allows Medicare to continue the process of negotiating lower drug prices as scheduled.

The Chambers’ case is one of eight meritless lawsuits seeking to overturn the Negotiation Program, which is overwhelmingly popular among voters of all parties across the country, to protect drug companies’ outrageous profits. While drug companies rake in billions and force seniors to skip doses of life-saving medicines, they charge up to four times more in the U.S. than in other countries. Read more about the lawsuits brought by big drug companies and their allies here. 

In response, Protect Our Care Chair Leslie Dach issued the following statement: 

“This decision means that greed lost and hard-working Americans won. All these lawsuits are meritless and driven by nothing more than corporate greed. Seniors shouldn’t be forced to cut pills and skip doses of lifesaving medications while the drug companies rake in outrageous profits. For now, Judge Newman’s decision means that Medicare can move forward and negotiate with drug companies to make prescription drugs more affordable for millions, but we must remain vigilant. The drug companies will continue using every tool in their arsenal in all of these cases so that they can continue to charge whatever they want.”

Washington, DC — Yesterday, Republicans on the House Ways and Means Committee once again considered legislation to promote the use of health savings accounts (HSA), which overwhelmingly benefit high-income people while worsening racial and ethnic inequities in health care. This legislation incentivizes the expansion of HSAs through tax breaks, which would cost taxpayers more than $70 billion to reward the highest-paid workers. This comes as Republicans are working to repeal the Inflation Reduction Act, raise prescription drug prices, and throw millions off of Medicaid. In response, Leslie Dach issued the following statement: 

“Republicans are putting their priorities on full display: doling out more tax breaks to the wealthy while threatening to shut down the government. Republicans could join the Democrats to focus on making prescription drugs more affordable, expanding affordable health care, or fighting the maternal mortality crisis, but instead they are working to line the pockets of the wealthiest Americans while exacerbating harmful racial inequities in our health care system. Time and again, Republicans prove they are all in on their war on health care with no signs of letting up.” 

Background

HSAs Make Health Care Less Accessible And Affordable. Republican efforts to promote the use of HSAs directly undermines the ACA’s goals to make quality health care more accessible and affordable for all Americans. The promotion of employer-sponsored high-deductible health plans that use HSAs increases the cost of health care for employees and continues the difficult decisions low-income working families have to make between putting food on the table or paying for medical care. 

HSAs Benefit The Wealthy. HSAs largely benefit high-income individuals. Contributions to HSAs are not taxed, which helps wealthy people decrease their taxable income and avoid paying their fair share. These contributions can also be invested in stocks and bonds to accrue tax-free earnings that carry over year to year — further exacerbating the wealth gap.

HSAs Do Not Make Care More Affordable for Low-Income Individuals. HSAs do not benefit low-income individuals as they often do not have the ability to contribute to HSAs and need to use their available income to pay for medical bills and care upfront. Nearly 70 percent of adults under 200 percent of the poverty line would not have been able to pay a $1,000 medical bill within 30 days in 2022, let alone contribute to a HSA. Low-income individuals also do not benefit as much from tax-free earnings as high-income individuals due to the lower amount of tax deductions from being in a lower income tax bracket. Employers who offer high deductible health plans, where HSAs are necessary, typically contribute little to nothing to their employees’ HSAs. 

HSAs Exacerbate Racial And Ethnic Inequities In Health Care. Black and Latino people with private insurance are half as likely to have HSAs as white and Asian people. Per the Center on Budget and Policy Priorities: “Against a backdrop of long-standing racial disparities in wealth — a typical white family in 2019 had eight times the wealth of a typical Black family and five times the wealth of a typical Latino family — HSAs provide preferential tax treatment that is disproportionately out of reach for people of color.”

HSAs Cost The Government Billions. HSAs will cost the government $182 billion between 2023 and 2032. Meanwhile, the cost of President Biden’s plan for permanently closing the Medicaid coverage gap or permanently extending marketplace coverage premium tax credits over the next 10 years would cost roughly the same amount at $200 billion and $183 billion respectively. Unlike the bills to expand HSAs, Medicaid expansion and marketplace premium tax credits would allow millions of uninsured individuals to gain quality coverage.

Washington, DC — Today, the Biden administration announced that nearly 500,000 children and adults who were improperly disenrolled from Medicaid and CHIP will regain their coverage thanks to steps taken by the Biden administration. Last month, CMS sent letters to states directing them to assess their automatic renewal systems in order to ensure that eligible people did not lose coverage, to reinstate coverage for those who had been wrongly terminated, and to permanently fix renewal systems. New data released today shows 30 states attested to running automatic renewal systems that don’t comply with federal requirements, and approximately 500,000 children and adults wrongfully had their Medicaid or CHIP coverage terminated. Thanks to the Biden administration’s actions, those people will once again receive Medicaid coverage and any medical bills they incurred while they were disenrolled from the program will be covered. This action further protects eligible people from losing coverage through the auto-renewal system.

The data released today show states including Nevada, Virgina, and Georgia have kicked eligible children and adults off the Medicaid rolls through their automatic renewal systems. Nevada has reinstated coverage for over 100,000 children and adults, Virginia has reinstated coverage for up to 49,999 children, and Georgia is still determining how many people it wrongfully terminated from coverage. This is in addition to eligible children and adults who have been kicked off Medicaid for procedural – or paperwork – reasons. Georgia and Florida have ended coverage for hundreds of thousands of children; Texas has ended Medicaid coverage for between 500,000 and 750,000 children. Many of the states that are needlessly throwing people off the rolls have also failed to expand Medicaid, showing how some governors are using the redetermination process as another way to limit Medicaid enrollment. In response, Protect Our Care Chair Leslie Dach issued the following statement:

“This announcement shows that protecting quality, affordable health care remains front and center for the Biden administration. It is unacceptable for children and families to lose Medicaid coverage because their state’s renewal system is not properly run. The Biden administration’s actions to direct states to fix their systems permanently have immediately protected coverage for half a million people, and thousands more in the future. It’s no surprise that many of the states that are failing to keep people covered, like Georgia, Texas, and Florida are the same ones that have rejected Medicaid expansion, leaving families with no place to turn for basic health care. These governors need to ensure people who qualify for Medicaid are not being kicked off, period.” 

Protect Our Care Along with Public Citizen, Senators and Leading Health Care Experts and Advocates File Briefs to Protect Medicare’s Power to Negotiate Lower Drug Prices

With Medicare slated to begin negotiating lower prescription drug prices with big drug companies in the coming weeks, drug companies and their mega lobbying group allies are desperately suing the federal government in an effort to protect their profits by halting the popular program. In one lawsuit, pharmaceutical company Merck has asked the court for a decision on their case without going to trial. In response, leading health care groups have filed briefs to deny the motion and protect the Inflation Reduction Act’s Medicare Drug Price Negotiation Program. Read more about the cases here. 

These meritless lawsuits are about one thing: protecting drug companies’ outrageous profits. Merck sells Januvia, a Type 2 diabetes drug that has been selected for negotiation. Januvia has been on the market without competition for 17 years and has grossed Merck $49.9 billion in sales since its launch. In 2021 alone, Medicare spent over $4 billion on the drug with an average of $4,343 per beneficiary while Merck CEO Robert Davis raked in $13.72 million. Since 2010, Medicare has spent nearly $28 billion on the drug. 

Medicare drug price negotiation is projected to lower costs for seniors and save taxpayers tens of billions of dollars, but big drug companies are eager to protect their outrageous prices and outsized profits. Drug companies that manufacture drugs that are likely to be eligible or were chosen for negotiation have a history of exploiting the patent system to protect their monopolies and keep competitor drugs off the market, spend millions on lobbying, and increase their list prices at rates that far exceed inflation.

Here are excerpts from the DOJ and health care expert and advocate briefs:

Department of Justice

Federal Government’s Opposition to Plaintiff’s Motion for Summary Judgment, and Cross-Motion: “For More Than 30 Years, Congress Has Imposed Limits on How Much Federal Agencies Pay for Prescription Drugs.” “Manufacturers who wish to sell their drugs to the Department of Defense and the Department of Veterans Affairs do so at statutorily defined ceiling prices, and both agencies have authority to negotiate prices further below those ceilings. […] Like other market systems, the Negotiation Program thus gives a manufacturer a choice: it can sell its products at prices a buyer is willing to pay, or it can take its business elsewhere. […] The IRA’s Negotiation Program is nothing more, and nothing less, than an example of Congress exercising its constitutional authority to control the use of federal funds. Such control fits squarely within the bounds of established precedent.” [Federal Government’s Opposition to Plaintiff’s Motion for Summary Judgment and Cross-Motion, 9/11/23]

Health Care Experts, Organizations, and Advocates

Protect Our Care, Public Citizen, et al.: “Merck’s Takings Clause claim rests on the flawed premise that ‘the whole point of the [IRA] Program is to take prescription drugs without paying their fair value.’” “Merck does not contest that it wants to sell brand-name drugs, including Januvia, to Medicare participants and beneficiaries. It does not contest that it will be paid for purchases of the drug. Instead, Merck argues that Medicare will pay less than the average amount that Merck prefers to charge in the United States – although not necessarily less than the amount that it charges other buyers in the United States or internationally. But Merck is wrong that its desire to impose a high monopolistic price on Medicare, the world’s largest drug purchaser, without negotiations, means that purchase below that price necessarily constitutes an unconstitutional taking.” [Protect Our Care, Public Citizen, et al. Amicus Brief, 9/13/23]

Sens. Amy Klobuchar, Peter Welch, Tammy Baldwin, Richard Blumenthal, Sherrod Brown, Catherine Cortez Masto, Richard J. Durbin, John Fetterman, John Hickenlooper, Jacky Rosen, Jeanne Shaheen, Debbie Stabenow, Chris Van Hollen, And Elizabeth Warren: “Congress Carefully Considered the Competing Interests at Stake in the Program and Struck an Appropriate Balance” “The Program was the culmination of ten years’ work examining the Medicare Part D system and escalating drug costs across the national economy. […] With the benefit of this long history and experience, Congress was fully prepared in 2021 to weigh and debate the negotiation provisions that would eventually win passage as part of the IRA. […] Naturally, Congress also heard from the Program’s opponents—and found their evidence and arguments wanting. […] The legislative record makes clear that Merck has simply repackaged the policy arguments it and its allies unsuccessfully advanced before Congress as constitutional arguments.” [Senators Amicus Brief, 9/19/23]

AARP and AARP Foundation: “Skyrocketing Drug Prices Have Stretched the Budgets of Older Adults to the Point Where They Are Forced to Make Impossible, Life-Altering Choices.” “The goal of the Negotiation Program is to end this public crisis and interject long-overdue fairness, transparency, and predictability into the drug pricing process. While prescription drugs are intended to treat illnesses and improve the quality of life, these benefits are meaningless if beneficiaries cannot afford them. […] Taken together, the IRA’s prescription drug provisions are designed to address high out-of-pocket costs, high taxpayer costs, and high drug prices. […] The other IRA provisions, though critical, cannot accomplish the goal of stopping escalating drug costs without the implementation of the Negotiation Program.” [AARP and AARP Foundation Amicus Brief, 9/18/23]

American Public Health Association et al.: “The Program Is A Vital First Step In Ensuring The Health Of Americans And The Medicare Program.” “Even without changing the price of new drugs, the public health benefits from lower drug prices for drugs that have been on the market for several years are likely to be orders of magnitude greater than the harm caused by this 1% reduction in new drugs: making existing drugs more affordable will enable more patients—especially low-income older people—to actually take and maintain existing necessary medication. […] Where funding for research and development comes from public programs, there is little reason to believe reduction in prices charged by manufacturers will result in substantially reduced effective and impactful innovation.” [American Public Health Association et al. Amicus Brief, 9/18/23]

Economists and Scholars of Health Policy: “The Inflation Reduction Act restores bargaining equity between manufacturers and consumers.” “These combined measures spur innovation and enable companies to recuperate their investment while protecting consumers from a market-wide overinflation of drug prices. The prescription-drug market has tipped in favor of manufacturers for decades, and the Inflation Reduction Act takes important steps to restore its balance.” [Economists and Scholars of Health Policy Amicus Brief, 9/18/23]

Nationally Recognized Healthcare and Medicare Experts: “Such rights do not apply to private parties’ relationships with the federal government.” “The [Drug Price Negotiation Program] is consistent with the federal government’s well-established ability to regulate the prices that the Medicare program pays for services by physicians, hospitals, and other providers. […] In claiming that the [Drug Price Negotiation Program] is an uncompensated taking of property in violation of the Constitution, Merck seeks to relitigate positions repeatedly rejected by courts in response to other challenges brought against federal healthcare programs.” [Nationally Recognized Healthcare and Medicare Experts Amicus Brief, 9/18/23]

Washington, D.C. — Today, House Budget Chair Jodey Arrington (R-TX) released a proposed budget for the next decade, which includes steep cuts to the Affordable Care Act, Medicaid, and Inflation Reduction Act, threatening health care for millions of seniors and families across the nation. Dismantling the Inflation Reduction Act would reverse prescription drug savings for seniors and make health care more expensive for families purchasing coverage on their own. This latest attack on health care comes at the same time House Republicans are threatening a government shutdown unless they get their way. The GOP budget resolution is slated for a committee markup tomorrow morning. 

In response, Protect Our Care Executive Director Brad Woodhouse issued the following statement:

“The GOP war on health care is alive and well. This is just the latest in a years-long effort to repeal the ACA, slash Medicaid and roll back any effort to make health care and prescription drugs more affordable for American families. The Republicans’ budget would do unspeakable harm to the progress made by the Biden-Harris administration through the Inflation Reduction Act. It’s a complete disgrace that while Democrats are working hard to lower health care costs for Americans, Republicans are trying to go backwards on progress.”

What Repealing the Inflation Reduction Act Means for American Health Care:

• GONE: Premium savings for over 13 million Americans covered under the ACA — averaging $2,400 per family.
• GONE: Medicare’s power to negotiate lower costs for the most popular and expensive prescription drugs.
• GONE: Prescription drug savings for seniors, including a $2,000 annual out-of-pocket cap and protections from Big Pharma’s price hikes.
• GONE: Free vaccines for seniors, including shingles and pneumonia.
• GONE: $35 monthly insulin caps for Medicare beneficiaries.

The CARE for Moms Act Includes Historic Investments to Strengthen Health Care Coverage During and After Pregnancy, Grow and Diversify the Doula Workforce, and Address Underlying Causes of Maternal Mortality

Watch the full event here.

Washington, DC — Today, U.S. Representative Robin Kelly (D-IL-02), National Medical Association President Dr. Yolanda Lawson, Maternity Care Coalition’s Sara Jann Heinze, and Vice Chair of the March of Dimes Board of Trustees Dr. Phyllis Dennery joined Protect Our Care to discuss her new legislation, the CARE for Moms Act, which is a comprehensive plan to combat the U.S. maternal mortality crisis. The bill includes critical steps to save lives, including by investing $35 million in state-based grants to improve perinatal care, mandating Medicaid coverage for new moms one year postpartum, extending Medicaid oral health coverage to pregnant and postpartum women, addressing implicit bias in the health care training, increasing and diversifying the doula workforce, and more. 

More than 1,000 women die annually due to complications of pregnancy or childbirth, making the U.S. maternal mortality rate three times higher than other wealthy nations. Black and Native women are at significantly greater risk of facing serious complications. Representative Kelly will introduce the CARE for Moms Act, which takes a multifaceted approach to promote the health of new mothers and their babies and the urgent need to stop the worsening maternal mortality crisis, on September 19. 

“I’m introducing the CARE For Moms Act because moms deserve better, Black moms deserve better,” said Congresswoman Robin Kelly, Chair of the CBC Health Braintrust. “When we take care of moms and prioritize prenatal and postpartum care, we can help entire families flourish. The reality is that too many moms, and particularly Black moms, are losing their lives. That’s why I’m pushing for change, supporting providers, and providing resources like mobile units and doulas. My goal is clear: to ensure that every mother has access to the care, empowerment, and resources necessary to be the best moms they can be.”

“The U.S. is lagging as a whole,” said National Medical Association President Dr. Yolanda Lawson. “Our country is faced with a shortage and a misdistribution of the maternal health care workforce which led to maternal health care deserts that are compounded by these hospital closures and closures of these obstetrical units. Then you look at black women in this country who are three to four times more likely to die and the disparity has increased and persisted for over 50 years. We talk about what we need to do to reduce these deaths and this bill is an important, useful, and substantive enhancement to these ongoing efforts to address and decrease maternal deaths.”

“We’re in a moment right now where folks are aware of the issues, and I don’t want us to miss the moment,” said Maternity Care Coalition’s Sara Jann Heinze. “This bill is investing in things that are already happening, work that we already know works that needs more resources. The health of our mothers is really one of the best measures to understand the health of our society, so investing in this work and having a broad-based coalition is important – we all need to be working together on these issues and helping people to understand the issue from multiple lenses.”

“After a premature birth, families face lifelong challenges, including economic, educational, and other things that impact their whole family,” said Vice Chair of the March of Dimes Board of Trustees’ Dr. Phyllis Dennery. “We have 900 maternal deaths each year and 80 percent of these are preventable, which is really a crisis. So I’m looking forward to this bill being passed because it is extremely important to all the mothers and babies in this country.”

“In the wealthiest nation on earth, it is unfathomable that our maternal mortality rate is three times higher than other nations,” said Communications Director for Protect Our Care Anne Shoup. “Our nation’s mothers are dying from fully preventable causes — with especially high risks for Black and Native mothers — and research shows that the problem is only getting worse. By making historic investments to strengthen health care coverage and address underlying causes of maternal mortality, the CARE for Moms Act is a critical step forward to improving the health and safety of families across the nation. We commend Representative Kelly for her leadership on this issue and urge Congress to do everything in its power to pass this legislation to save lives.” 

Dayton Area Chamber of Commerce et al. v. Becerra et al. Brings Meritless Challenge to Medicare, Threatening Billions in Savings for Seniors and Taxpayers 

Washington, DC — Today, a federal judge in Ohio held oral arguments in a lawsuit brought by the Chambers of Commerce to stop Medicare from negotiating lower drug prices for millions of seniors. The lawsuit was brought by a group of national, state, and regional Chambers of Commerce that asked for a nationwide preliminary injunction to halt the Biden administration’s implementation of the program and allow drug companies to continue to charge whatever they want for lifesaving medications. A ruling on the case is expected before October 1st.

The Chambers’ case is one of eight meritless lawsuits seeking to protect drug companies’ outrageous profits. While the drug companies rake in billions and force seniors to skip doses of their life saving medicines, they charge up to four times more in the U.S. than in other countries. Read more about the lawsuits brought by big drug companies and their allies here.

In response, Protect Our Care Chair Leslie Dach issued the following statement: 

“This case has no legal merit. Drug companies and the Chambers of Commerce that are doing their bidding are basically asking a judge to protect their massive profits at the expense of millions of seniors. This case is just one of many in which drug companies and their mega lobbying group allies are desperately suing the federal government in an effort to protect their ability to charge whatever they want for drugs that millions rely on to stay alive. Meanwhile, seniors are cutting pills and skipping doses of lifesaving medications. Millions are depending on the savings from the Medicare negotiation program, and it is vital that Judge Newman reject this meritless lawsuit.” 

***MEDIA ADVISORY FOR MONDAY SEPTEMBER 18 AT 11:00 AM ET // 10:00 AM CT***

The CARE for Moms Act Includes Historic Investments to Strengthen Health Care Coverage During and After Pregnancy, Grow and Diversify the Doula Workforce, and Address Underlying Causes of Maternal Mortality

Washington, DC — On Monday, September 18, 2023 at 11 AM ET, U.S. Representative Robin Kelly (D-IL-02) and National Medical Association President Dr. Yolanda Lawson will join Protect Our Care to discuss her new legislation, the CARE for Moms Act, which is a comprehensive plan to combat the U.S. maternal mortality crisis. The bill includes critical steps to save lives, including by investing $35 million in state-based grants to improve perinatal care, mandating Medicaid coverage for new moms one year postpartum, extending Medicaid oral health coverage to pregnant and postpartum women, addressing implicit bias in the health care training, increasing and diversifying the doula workforce, and more. 

During the call, speakers will discuss how the CARE for Moms Act takes a multifaceted approach to promoting the health and safety of new mothers and their babies and the urgent need to stop the worsening maternal mortality crisis. More than 1,000 women die annually due to complications of pregnancy or childbirth, making the U.S. maternal mortality rate three times higher than other wealthy nations. Black and Native women are at significantly greater risk of facing serious complications. Representative Kelly will introduce the CARE for Moms Act on September 19.

PRESS CALL:

WHO:
U.S. Representative Robin Kelly (D-IL-02)
Dr. Yolanda Lawson, President of the National Medical Association
Dr. Phyllis Dennery, Pediatrician-in-Chief at Rhode Island Hospital, Medical Director of Hasbro Children’s Hospital, Vice Chair of March of Dimes Board of Trustees
Sara Jann Heinze, Director of Policy & Advocacy at Maternity Care Coalition
Protect Our Care

WHAT: Virtual Press Conference 

WHERE: Register for the Event Here

WHEN: September 18, 2023 at 11 AM ET

Drug Companies Falsely Claim Innovation Will Suffer As Patients in America Cut Pills and Skip Doses to Make Ends Meet

The Biden administration recently announced the first round of high-cost drugs whose prices will come down as Medicare negotiates with the drug companies. The new program, which is overwhelmingly popular with voters from all parties, will lower costs for certain drugs used to treat conditions like cancer, diabetes, heart disease, and autoimmune disorders – which disproportionately impact women, communities of color, and people in rural areas.

However, big drug companies are suing in the courts to try to stop the Inflation Reduction Act’s core provision of giving Medicare the power to negotiate lower drug prices. They have also started a campaign of lies in an attempt to persuade people that allowing Medicare to negotiate lower prices will prevent drug companies from introducing innovative drugs. But innovation isn’t really what the drug companies are worried about – they just want to protect their profits, continue to line their CEOs’ pockets, and take advantage of patients. In reality, giving Medicare the power to negotiate will save seniors and taxpayers billions while rewarding innovative drugs. 

Legal and health care experts are fighting back against the misinformation campaign. Here’s what they have to say:

Cynthia Ho, Director of the Intellectual Property Program at Loyola University of Chicago School of Law, and Liza Vertinsky, Law Professor at the University of Maryland Francis King Carey School of Law, said: “Once a More Nuanced Approach to Innovation Is Considered, the IRA Might Even Increase Innovation in Higher Public Value Drugs.” “We posit that the current lawsuits and other backlash against the IRA are simply the latest examples of what we refer to as “innovation bullying” by the pharmaceutical industry. And we suggest that this innovation bullying has real costs that can and do deter welfare-improving drug regulation and even valuable innovation.” [Health Affairs, 9/11/23]

Ed Silverman, Pharmalot Columnist and Senior Writer at STAT, said: “If the Pharmaceutical Industry Expects the Public to Heed Its Warnings, It Will Have to Do a Better Job of Explaining Why Swaths of Patients May One Day Lose Out on Treatments.” “Beyond complaining about price controls and unconstitutional mandates, the key message aimed at the American public has been that innovation will suffer. This is a familiar but tiring refrain. When policymakers have attempted to address prescription drug costs in the past, the industry has often rattled this sabre, warning any attempt to rein in pricing would boomerang and some therapies will never be developed.” [STAT, 9/7/23]

The Brookings Schaeffer Initiative on Health Policy’s Richard G. Frank and Caitlin Rowley said: “Despite the Pharma Companies’ Fears, Negotiating Medicare Prices Will Not Lead to a ‘Nuclear Winter.’” “However, such forecasts are unfounded. […] Not only are revenues enough to justify the investment in these particular drugs, they are enough to fund several more generations of pharmaceutical development. Lower negotiated prices are unlikely to deter further investment in similar medications.” [Bloomberg Opinion, 9/5/2023]

The Brookings Schaeffer Initiative on Health Policy’s Richard G. Frank and Ro W. Huang said: “To Date, We Have Found Little Evidence Suggesting a Disruption in Activities and Investments That Will Yield New Pharmaceutical Products in the Years to Come.” “When coupled with optimism expressed in recent large drug company earnings reports, the evidence indicates that the investment environment for drug development remains largely unchanged by the IRA’s drug price negotiation program and is currently not threatened by it.” [Brookings Institution, 08/23/23]

Rachel Sachs, Professor of Law at Washington University, and The Brookings Schaeffer Initiative on Health Policy’s Loren Adler and Richard G. Frank said: “IRA Opponents’ Innovation Concerns Are Overstated and Oversimplified, Overlooking Important Dimensions of Innovation for Patients.” “The oversimplified vision of “innovation” and the IRA’s relationship to it presented by many of the law’s detractors simply do not match the nuanced vision of innovation encompassed either in the IRA or in adjacent policies that the Biden Administration has simultaneously pursued. […] Taken together, it is even possible that these combined changes could increase the development of higher-value drugs, and at the same time reducing costs and increasing patient access.” [Health Affairs Scholar, 6/20/23]

Former U.S. Representative Henry A. Waxman, Chairman of Waxman Strategies, said: “Above All, An Innovative Drug Doesn’t Help Anyone If It Is Unaffordable.” “The reality is there is currently no correlation between a drug’s list price and its R&D costs. The price of insulin has skyrocketed by 64 percent since 2014 not because of innovation, but because the drug companies could get away with it. […] The manufacturer AbbVie doubled Humira’s price from about $19,000 per year to $38,000 per year for Americans. But in Europe, the company cut the drug’s price by 80 percent and is still not losing money.” [Health Affairs, 12/10/19]

Michael A. Carrier, Professor of Law at Rutgers University School of Law, and Genevieve Tung, Associate Director for Educational Programs at the Biddle Law Library, said “Drug Companies Play Games.” “Big Pharma has cried Innovation Wolf every time Congress seeks to address its shenanigans. And the legislators keep coming to defend it. That has to stop. It is past time for the industry to be called to account on using its get-out-of-jail-free innovation card to avoid reasonable legislation.” [STAT, 9/26/19]

Larry Levitt, Executive Vice President for Health Policy at KFF, said: “The Issues Raised by Critics Can Be Complex and Nuanced, Involving Trade-Offs Not Always Easily Condensed Into Sound Bites.” “One of the big reasons any effects on innovation may be muted is that drugs are shielded from government negotiation for quite a while: until nine years after Food and Drug Administration approval for small-molecule drugs like pills and 13 years for injectable biological products. Drugmakers can continue to set their own prices and reap substantial profits before having to submit to negotiation.” [New York Times, 9/6/23]

Today, the federal government will be filing a judgment motion in Merck v. Becerra et al. Merck is one of several drug companies suing the federal government to stop Medicare from negotiating lower prescription drug prices on behalf of millions of seniors. Merck’s Januvia was recently announced as one of the 10 drugs selected for negotiation. This comes just after Merck announced it raked in $15 billion last quarter – a $450 million increase over last year. While they make billions, Americans pay exorbitantly high prices for prescription drugs. 

By The Numbers

• Merck has reported nearly $51 billion in global sales for Januvia since it launched in 2006. 
• Januvia is responsible for over $28 billion in gross Medicare spending as of 2021. 
• Merck has issued over $200 billion in stock buybacks since launching Januvia.
• Merck has spent over $115 million on lobbying since launching Januvia.
• Merck has been on the market without competition for over 17 years. 
• In 2022, 885,000 Medicare enrollees took Januvia. 
• Januvia costs the average Medicare enrollee without a subsidy over $500 per year out-of-pocket.
• Merck reported $15 billion in earnings for Q2 2023, a 3% increase from Q2 2022. 
• Merck initiated over $300 million in stock buybacks in Q2 2023. 
• Merck’s stock price has increased 24% over the past year. 

Merck Has Made Billions From Januvia At The Expense of Seniors. Merck has reported nearly $51 billion ($50,897,600,000) in global sales for Januvia since it launched in 2006. Januvia is responsible for $28 billion in gross Medicare spending. Merck has issued over $200 billion in stock buybacks since launching Januvia and spent over $115 million on lobbying. In 2022, 885,000 Medicare enrollees took Januvia. Januvia costs the average Medicare enrollee without a subsidy over $500 per year out-of-pocket.

Merck Has Gamed The Patent System To Protect Billions In Revenue. Merck has been on the market without competition for over 17 years, and Merck has gamed the patent system to thwart competition for an additional 3.3 years, protecting $3.5 billion in revenue.

Instead Of Spending On Research & Development, Merck Has Spent Lavishly On Stock Buybacks To Boost The Company’s Value and Reward Shareholders. Rather than pricing Januvia at an affordable and accessible price, Merck has spent hundreds of billions on stock buybacks to boost its investors and reward its executives. While the company rakes in billions, U.S. drug prices for Januvia are up to nine times higher than prices in other high-income countries like Australia.

Merck’s stock price has increased 24% over the past year after the company initiated $300 million in stock buybacks in Q2 2023. On Aug 1, CFO Caroline Litchfield touted the company’s “very strong growth of 14%” and said they expect that to continue: “As we look out to 2024 and beyond, we continue to expect strong growth including the impact of additional approvals.” Merck also acquired Prometheus Biosciences for $10.8 billion in June.

Read more about why Medicare needs the power to negotiate lower drug costs and the five drugs that tell the story, including Januvia, here.