Supreme Court Turns Away First Wave of Negotiation Program Challenges

What Happened?  

On May 18, the Supreme Court denied all six petitions for certiorari filed by drug manufacturers challenging the IRA’s Medicare Drug Price Negotiation Program, bringing much of the first wave of constitutional challenges to a close.

As we have covered extensively in prior updates, manufacturers began filing suit even before the first ten negotiation-eligible drugs were published in late August 2023. They pressed a wide range of constitutional and statutory theories, including challenges under the Due Process Clause, the Takings Clause, the First Amendment, the Eighth Amendment's Excessive Fines Clause, and the Administrative Procedure Act.

To date, the government has won every battle on the merits in both the trial and appellate courts. Last May, the Third Circuit issued the first appellate decision on the merits, affirming the district court’s rejection of AstraZeneca’s procedural-due-process challenge and holding that manufacturers have no property right to sell their products or demand government reimbursement at specific prices. The Second Circuit followed suit, affirming the dismissal of Boehringer Ingelheim’s claims — Takings Clause, First Amendment compelled-speech, and unconstitutional-conditions theories — on the same voluntariness rationale. The Third Circuit later followed on with opinions in four more cases, rejecting each and every theory advanced by Janssen, Bristol Myers Squibb, Novo Nordisk, and Novartis, though generating a dissent in some of the cases.

Each manufacturer petitioned to the Supreme Court for review. But none got traction, with their petitions denied after the first conference at which they were considered. The manufacturers did not secure the four votes needed for certiorari, one fewer than they would have needed to prevail at First Street.  

Why Does It Matter?  

This is effectively the end of the road for the first wave of challenges. There remain just two cases from the first wave pending, one in the Fifth Circuit and one in D.C. federal court. There have also been recent filings as the second and third waves of Negotiation Program drugs have been identified, with one already on appeal in the D.C. Circuit. A ruling in the manufacturers’ favor in either circuit would create a live circuit split and could give the Supreme Court a reason to step in. 
 

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