The U.S. Chamber of Commerce on Friday sued the federal authorities, difficult a brand new legislation that for the primary time offers Medicare the facility to barter drug costs with pharmaceutical firms.

In a grievance filed in federal court docket in Dayton, Ohio, the chamber stated the pricing program violated drugmakers’ due course of rights below the U.S. Structure by giving the federal government “unfettered discretion” to dictate most costs.

It additionally stated this system would impose exorbitant penalties on drugmakers that don’t settle for these costs, and amounted to an ultimatum: “comply with no matter value the federal government names, or we’ll smash up your enterprise.”

The U.S. Division of Well being and Human Providers administers Medicare via its Facilities for Medicare & Medicaid Providers.

A spokeswoman stated the company will vigorously defend this system, which is already serving to decrease healthcare prices for older adults and other people with disabilities. “The legislation is on our facet,” she added.