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takings clause
'Shameful': Ro Khanna Confronts Big Pharma Lawyer Over Medicare Drug Prices
The California Democrat accused Johnson & Johnson—makers of the $160,000-per-year leukemia drug Imbruvica—of floating a "flimsy legal theory" in a "desperate attempt to protect profits."
Sep 13, 2023
U.S. Rep. Ro Khanna on Wednesday ripped a senior Johnson & Johnson attorney after she repeatedly dodged questions regarding the legal justification for the pharmaceutical giant's lawsuit alleging government efforts to negotiate lower drug prices are "unjust taking."
At a House Oversight Committee hearing, Khanna (D-Calif.) grilled J&J assistant general counsel Aviva Weis over the company's federal lawsuit, which argues that Medicare drug price negotiations—an overwhelmingly popular provision of the Inflation Reduction Act (IRA)—violate the First and Fifth amendments of the U.S. Constitution.
The J&J suit—and litigation separately initiated by Merck, Bristol Myers Squibb, Astellas, the U.S. Chamber of Commerce, and the industry lobby Pharmaceutical Research and Manufacturers of America (PhRMA)—alleges in part that the IRA mandate runs afoul of the takings clause, which states, "Nor shall private property be taken for public use, without just compensation."
Referring to Imbruvica—one of the first 10 drugs tapped by the Biden administration for Medicare price negotiations—Khanna told Weis that "you've got a pill for leukemia patients, you sell it for $484 per capsule, that's $160,000 a year, you make $22 billion over that over the last 10 years, and you're making $65 billion in profit."
"Now, we have passed, as a Congress, and the president has signed a bill, saying: 'You know what? Let Medicare negotiate to try to bring that price down,'" the congressman continued. "And you, in your department—'cause you're assistant general counsel—have filed a lawsuit saying that negotiation would be an 'unjust taking.'"
When Weis tried to avoid saying whether she believes that federal agencies negotiating drug prices with pharmaceutical companies constitutes "taking," Khanna said:
I guess I don't understand how, being the assistant general counsel, you can come before the United States Congress when you're suing the United States government, saying that we are taking your property. Now, that's a very serious charge... and you don't know whether it's a taking?
Khanna asserted that it's necessary for federal agencies to negotiate drug prices so that pharmaceutical firms "don't make $65 billion in profits every year and so leukemia patients don't pay $160,000" for a year's supply of Imbruvica.
"I think it is shameful what you and the pharmaceutical companies have done in suing the United States government to protect those profits," he added, "and you are totally unprepared to answer a single question about what the takings clause is and the justification for that lawsuit."
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