AARP urges courts to keep drug pricing talks on track

AARP is one of the few groups so far to have filed an amicus brief on supporting of the U.S. Department of Health and Human Services. The suit from the U.S. Chamber of Commerce and several pharmaceutical companies, including Merck (MRK) and Johnson & Johnson (JNJ), is asking the courts to delay the implementation of a new law that would let Medicare negotiate the prices of certain drugs. Yahoo Finance Health Care Reporter Anjalee Khemlani reports the details.

Video Transcript

- The legal battle over Medicare's drug pricing negotiations is heating up, and it could be heading to the Supreme Court. AARP opposing the Chamber of Commerce's request to delay the implementation of that part of the Inflation Reduction Act. Yahoo Finance's Anjalee Khemlani is following this story for us. Anj.

ANJALEE KHEMLANI: That's right, Seana. So AARP adding its name to the very short list, the only one so far to file an amicus brief on behalf of the health department and specifically, Health Secretary Xavier Becerra, who's been named in these lawsuits brought on by multiple pharma companies, as well as the US Chamber of Commerce and pharma, the large lobbying firm that represents all of the pharma companies.

Now, it is, as you can see on your screen, a growing list on the against side. These companies asking for a delay in the implementation and also calling it unconstitutional. A number of these lawsuits name different amendments, including the First, Fifth, Eighth, as well as Ninth and 10th in some instances, saying that the implementation of the rule would be taking away free speech by forcing at the end of the day these companies to sign on after a brief negotiation period.

As well as the Fifth Amendment, saying that it's an excessive-- sorry, government seizing property by taking the drugs at a negotiated price that they're, quote unquote, being forced to take. And then the Eighth Amendment being cited as excess tax in the fines that these companies would face for noncompliance according to Medicare.

So all of this put together is really setting up the stage for possibly a long, drawn out battle. Bloomberg just reporting today that legal experts do say it could head to the Supreme Court, especially because of that use of the Fifth Amendment and specifically calling it unconstitutional. So it will be certainly an interesting one to watch.

AARP saying that the delay on this rule could really harm patients, especially those who need the lifesaving drugs at lower prices, they said so in their filing. And they're looking at what else can be done there. This battle really is not over. We do expect likely more companies who are weighing their timing of entry, as well as other organizations that could file also on behalf for the Medicare pricing negotiations. So all within the timeline. We know that 2026 is that starting period. So time is starting to count down.

- Certainly is. All right. Anjalee Khemlani, thanks so much for that update.