Supreme Court Rejects Pharma Appeals Over Medicare Drug Price Negotiation Program
Supreme Court Rejects Pharma Appeals Over Medicare Drug Price Negotiation Program
Washington, May 18, 2026 — The U.S. Supreme Court declined to hear appeals from several major pharmaceutical companies challenging the Medicare drug price negotiation program created under the 2022 Inflation Reduction Act, leaving lower-court victories for the federal government in place. The decision keeps the Biden-era policy moving forward as Medicare begins using negotiated prices for selected high-cost medicines.
What the Supreme Court Decision Means
The justices’ refusal to take up the cases does not create a new nationwide Supreme Court ruling on the merits. However, it allows earlier decisions from federal appeals courts to stand. Those courts had rejected arguments that the negotiation program violated drugmakers’ constitutional rights.
The companies involved included Novo Nordisk, AstraZeneca, Janssen Pharmaceuticals, Bristol Myers Squibb, Novartis, and Boehringer Ingelheim. They argued that the government was not truly negotiating prices, but forcing companies to accept below-market rates or face harsh financial consequences.
Why Drugmakers Challenged the Program
Pharmaceutical companies said the program violated the Fifth Amendment by taking property without fair compensation and harming due process rights. Some also argued that the program violated the First Amendment by requiring companies to present government-selected prices as “fair.” Novo Nordisk separately argued that Congress gave too much power to a federal agency, raising separation-of-powers concerns.
The federal government rejected those claims, saying drug companies are not forced to participate in Medicare and Medicaid. The government also argued that Medicare, as a major public health insurance program, has legal authority to negotiate prices for selected expensive medicines.
How the Medicare Drug Price Program Works
The program allows the Centers for Medicare & Medicaid Services, known as CMS, to negotiate prices for certain high-spending drugs covered by Medicare. Medicare mainly serves Americans age 65 and older, as well as some younger people with disabilities.
The first negotiated prices for 10 Medicare Part D drugs took effect on January 1, 2026. CMS has said these prices are intended to lower costs for both the Medicare program and patients who depend on expensive prescription medicines.
Impact on Patients and Medicare Costs
Supporters say the program could reduce out-of-pocket costs, premiums, and federal spending. According to CMS information summarized by KFF, the first round of negotiated prices was estimated to save Medicare billions of dollars and reduce patient out-of-pocket costs.
The policy is especially important because Americans generally pay more for prescription medicines than people in many other wealthy countries. For seniors taking multiple medicines, even a small reduction in monthly drug costs can make a major difference.
Political Significance
The drug price negotiation program was one of the most important healthcare provisions in the Inflation Reduction Act signed under former President Joe Biden. Although Republicans opposed the original law, the current Trump administration defended the program in court and has presented drug-price reduction as part of its healthcare agenda.
What Happens Next
The Supreme Court’s move makes it harder for the pharmaceutical industry to stop the program through these specific lawsuits. More drugs are expected to be added in future negotiation rounds, meaning the policy could expand over time unless Congress changes the law or another legal challenge succeeds.
For now, Medicare’s negotiation system remains active. Drugmakers may continue criticizing the policy, but the government has gained a major legal advantage by keeping the appeals-court rulings in place.
Conclusion
The Supreme Court’s decision is a major win for the federal government and a setback for the pharmaceutical industry. By declining to hear the appeals, the court allowed Medicare’s drug price negotiation program to continue. The outcome strengthens a policy designed to lower prescription drug costs for older Americans while increasing pressure on drug companies over pricing practices.
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