The Odds Don’t Favor Merck’s Drug Price Negotiation Lawsuit

Merck filed suit against the Centers for Medicare and Medicaid Services (CMS) recently, marking the first pharmaceutical company to do so. However, according to Stephen L. Carter of Bloomberg, the lawsuit may be dead in the water. The reason, he argues, is the basis of the suit, which hinges on the idea that price caps equate to the government seizing private property without fair compensation and that the language of the bill is a violation of the First Amendment.

According to Stephen L. Carter, “On the first claim, although many wise scholars have argued that price controls represent an uncompensated taking of private property, the US Supreme Court eight decades ago held the opposite. To be sure, that case involved rent control in time of war, but it’s still followed today. The justices provided a narrow exception: Compensation might be due if the plaintiff isn’t free to get out of the regulated market.”

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(Source: Washington Post, June 7^th, 2023)