Merck sues government over drug price negotiation

Drugmaker Merck & Co. Inc. sued the federal government Tuesday, seeking an injunction against parts of last year's reconciliation law that allow the Health and Human Services Department to negotiate for lower prices on drugs.

The lawsuit, filed in the U.S. District Court for the District of Columbia, argues that the negotiation program is “extortion” and violates the Fifth Amendment by not paying the company “just compensation” for its products.

“By coercing Merck to provide its drug products at government-set prices, the Program takes property for public use without just...