Johnson & Johnson files lawsuit against Biden administration

Johnson & Johnson (NYSE: JNJ) is in focus today after the pharmaceutical behemoth filed a lawsuit against the Biden Administration in a federal district court.

Here’s why J&J sued the Government

In its complaint, the multinational argued that letting Medicare have the power to cut drug prices – as the Inflation Reduction Act does – is against the Fifth Amendment of the U.S. Constitution.

We bring this action to stop innovation-damaging congressional overreach that threatens the U.S. primacy in developing transformative therapies and in patients’ access to those treatments.

CMS is scheduled to name the drugs it picked for the first round of negotiations on September 1^st. Johnson & Johnson expects its “Xarelto” to be on that list.

The treatment for blood clots brought in $2.47 billion in revenue last year.

J&J demands its right to free speech

J&J also finds the Program in violation of the First Amendment as it compels the company to agree with the Administration’s false and misleading statements thereby refusing its right to free speech.

While the Government may choose to deceptively describe the Program as involving an agreement to negotiate a fair price, it can’t force manufacturers to echo its misleading messaging.

Note that the New York listed firm has spent nearly $66 billion on pharmaceutical research and development since 2016. The news arrives just days after Jim Cramer cautioned against capitalising on a 10% year-to-date decline in Johnson & Johnson as Invezz reported here.

In June, its peer Merck also sued the Biden Administration for the same reason.