In a series of decisions last week, federal courts continued to reject the pharmaceutical industry’s attempts to stop the Medicare prescription drug price negotiation program.
- The Second Circuit Court of Appeals addressed a drug manufacturer’s claims that the Medicare drug price negotiation program violated multiple constitutional rights, including Fifth Amendment due process, Fifth Amendment “taking” without just compensation, First Amendment freedom from compelled speech, and conditioning of participation in Medicare and Medicaid on the relinquishment of the company’s constitutional rights. The court rejected the drug company’s constitutional claims because participation in the negotiation program is voluntary, and because the program “is designed to promote the legitimate government purpose of controlling Medicare spending and does not regulate the company’s conduct in the private market.”
- A federal district court in Texas similarly ruled that because participation in the negotiation program is voluntary, the plaintiffs were not deprived of due process rights. The court concluded that the plaintiffs do not have a constitutionally protected interest in selling drugs to Medicare “at their professed ‘fair market value.’”
- The Sixth Circuit Court of Appeals held that the plaintiffs lacked standing to pursue their challenge against the negotiation program in Ohio. Notably, the court criticized what amounted to forum shopping by drug companies by using a regional chamber of commerce as a proxy. The Dayton Chamber of Commerce “appears to be more of a ‘stalking horse’ for Pharmacyclics and AbbVie in seeking a perceived favorable venue that Pharmacyclics and AbbVie could not obtain on their own.”
Drug companies and their allies have brought numerous cases nationwide challenging the negotiation program, which was established by the Inflation Reduction Act of 2022. The law empowers Medicare to use its considerable bargaining power to obtain lower prices for certain expensive medications, helping beneficiaries afford life-sustaining prescription drugs while protecting Medicare’s financial integrity and saving taxpayers billions of dollars.
The Center for Medicare Advocacy is part of a coalition led by AARP submitting amicus briefs in support of the Medicare drug price negotiation program. While we applaud these continuing court victories, the Center is disappointed that the recently enacted H.R.1 “One Big Beautiful Bill Act” rolls back Medicare’s ability to negotiate drug prices. We will continue to monitor the progression of the pharmaceutical industry’s litigation as more cases are appealed, and we will advocate for Medicare to use its bargaining power to help beneficiaries and taxpayers alike.
August 14, 2025 – A. Bers