Merck is suing the federal government over a plan to negotiate Medicare drug prices, calling the program a sham equivalent to racketeering.

The drugmaker is trying to shut down the program, which was enshrined in the Inflation Reduction Act and is expected to save taxpayers billions of dollars in years to come.

Merck said in a complaint filed Tuesday that the program does not involve any real negotiations. Instead, it said the US Department of Health and Human Services selects the drugs to include and then dictates the price, threatening the drugmakers with a catastrophic daily excise if they refuse to agree.

It amounts to extortion, the drugmaker said in the complaint filed

the

US court in Washington

DC

.

The Rahway, NJ-based

pharmaceutical company

added that it expects its Januvia diabetes treatment to be part of the IRAs arrangement that begins later this year.

Column: Everyone is pleased that Medicare can finally negotiate the price of medicines. Prepare to be disappointedRepresentatives of the federal agency did not immediately respond to requests for comment from the Associated Press. Xavier Becerra, Secretary of Health and Human Services, said in a prepared statement that they intend to vigorously defend the drug price negotiation plan. The law is on our side, he said. The lawsuit names Becerra as a defendant, as well as his division and Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services.

Merck said in the complaint that the plan in the

IRA Inflation Reduction Act

suggests that federal officials sit down with drugmakers and make voluntary pricing agreements.

But the drugmaker said the program does not involve actual negotiations or agreements. It said HHS chooses the drugs to include and then leans on manufacturers

the drug makers

to give substantial discounts under the tax threat.

Merck says the program violates the U.S. Constitution in a number of ways. They include the 5th Amendment’s requirement that the government pay “just compensation if it takes property for public use,” the complaint said.

The drugmaker noted that Congress could have simply allowed HHS to set a maximum price it would pay for a drug or used its influence to negotiate, which

but that

would have

allowedenabled

Drugmakers run away from conversations.

Column: Biden says he wants to cut drug prices. His actions tell a different story

Instead, Merck said, the government is using the threat of harsh punishment to requisition drugs and refuses to pay a fair price, forcing drugmakers to smile, play along and pretend it’s all part of a fair and voluntary exchange.

This is political Kabuki theatre, the complaint states,

noting that allowing drugmakers to walk away from negotiations risks angering Medicare beneficiaries who may not be able to get their drugs. Medicare is the government-funded program of coverage, primarily for people age 65 and older.

Republican lawmakers have also criticized the president

joe

Biden’s administration on the plan, noting that it could force drugmakers to back down from introducing new drugs that could be subject to haggling.

The federal government is expected to release rules for negotiating drug prices soon and then publish a list of 10 drugs in September on which it will start price negotiations next year.

The plan marks the first time

ever

that the federal government will negotiate price directly with drug companies

what they charge for

some of Medicare’s most expensive drugs.

Congress had previously banned such negotiations.

Negotiated prices will not take effect until 2026.

Murphy writes for the Associated Press. Associated Press writer Amanda Seitz contributed to this report.