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Johnson & Johnson On Tuesday, the company sued the Biden administration over Medicare’s new power to slash drug prices, making it the third drug company to challenge a controversial provision of the Reducing Inflation Act.

The lawsuit, filed in federal district court in New Jersey, said the Medicare negotiations violated the First and Fifth Amendments to the U.S. Constitution.

Similar arguments have been made in previous separate lawsuits by Merck & Co and Bristol-Myers Squibb, as well as by the U.S. Chamber of Commerce and the pharmaceutical industry’s largest lobbying group, PhRMA.

Johnson & Johnson’s complaint asks a judge to block the U.S. Department of Health and Human Services from forcing drugmakers to participate in the program.

Johnson & Johnson said the lawsuit was aimed at preventing “overreach by Congress that undermines innovation and that threatens America’s primacy in developing transformative treatments and patients’ access to them.”

President Joe Biden’s Lower Inflation Act, which passed on a narrowly partisan vote in 2022, gave Medicare the ability to negotiate drug prices for the first time in the program’s 60-year history. The policy aims to make medicines more affordable for older Americans, but could reduce profits for the pharmaceutical industry.

HHS did not immediately respond to CNBC’s request for comment.

Johnson & Johnson said its drug Xarelto, which treats blood clots and reduces the risk of stroke, will be subject to Medicare price negotiations in 2023.

J&J argued that the Medicare negotiations “created unpaid physical use” of the company’s drug and essentially forced J&J to provide access to Xarelto on terms set by the federal government that the company would “never voluntarily “Agree to these terms.

The company earned $2.47 billion in revenue from Xarelto last year.

The story is developing. Please check for updates.


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