After Merck filed a bombshell lawsuit contesting the negotiation measures in the Inflation Reduction Act (IRA), the company’s shareholders at the Interfaith Center on Corporate Responsibility (ICCR) are none too pleased.
Investors at the ICCR are in favor of the pricing measures Merck is challenging. Its members of the group have “long advocated” for Medicare’s ability to negotiate drug prices, the group said in a recent statement.
“The IRA seeks to install fair and transparent guardrails … that will dismantle monopolies and make drugs more affordable for our seniors,” ICCR member Christina Dorett said in the group's statement.
Under the IRA, the federal government will begin negotiating prices on certain drugs in 2026. The new law also enables the government to dish out penalties for price hikes that outpace inflation.
Merck has argued that the Medicare negotiation law violates the Fifth and First amendments pertaining to rights over private property and free speech.
But the ICCR shareholders are looking to turn the company's argument on its heels. In Merck's own Access to Health Principles, the company states that it “develops, tests and implements innovative solutions that address barriers to access and affordability."
The investors are asking the company to reconsider its position and instead “focus on the company’s stated mission,” which is using its science to “save and improve lives around the world,” ICCR says.
A Merck spokesperson responded by pointing to the company’s recent statement on the IRA’s “negative impact on patient-focused innovation, value and access."
In the statement, issued before the ICCR’s denouncement, Merck notes that the IRA “creates the false impression that innovators like Merck are voluntary participants in its program by coercing them to sign an 'agreement' conveying that the government-set prices are the 'fair' result of a 'negotiation.'"
While Merck might not have the ICCR's support, the drugmaker is backed by its peer companies. At this year’s BIO International Convention in Boston, Biogen's new CEO Chris Viehbacher said that his company is also considering filing a lawsuit and that Merck’s extortion argument is “accurate.”
Meanwhile, Novartis CEO Vas Narasimhan said at a PhRMA-hosted luncheon that the IRA is “Draconian in how it is set up.”