Protecting the Healthcare Innovation Ecosystem
July 18, 2023 – Johnson & Johnson and its Janssen pharmaceutical companies have delivered transformative medicines to patients for more than 130 years. Our ability to deliver these breakthroughs is possible because of a robust research and development ecosystem in which we have invested nearly $65.7 billion since 2016 to prevent, treat, and potentially cure a wide range of devastating diseases.
Today, we filed litigation against the U.S. Department of Health and Human Services as well as the Centers for Medicare and Medicaid Services to challenge the innovation-damaging drug pricing provisions of the Inflation Reduction Act (IRA). The IRA breaks the agreement at the heart of the patent and regulatory laws: when companies invest and succeed at developing innovative new treatments, they are awarded time-limited and constitutionally protected rights in their innovation.
With the implementation of the IRA, the government is forcing Janssen to provide its innovative, patented medicines on pricing terms that by law must be significantly below market prices. This would upend the current self-sustaining cycle of pharmaceutical innovation that provides patients with access to pioneering treatments, and directly impacts the creation of generic medicines that account for 90% of prescriptions filled in the U.S. If manufacturers do not “agree” to the government-dictated terms of the IRA, they face massive penalties up to 1900% of a selected drug’s daily sales or are forced to withdraw all of their products from both Medicare and Medicaid—potentially depriving nearly 40% of U.S. patients of needed medicines.
We believe that the IRA’s pricing provisions will constrain medical innovation, limit patient access and choice, and negatively impact the overall quality of patient care. We have a responsibility to challenge the current version of the law to protect our ability to continue developing transformative medicines for patients now and in the future.