The Supreme Court’s action strengthens the stability of the Medicare Drug Price Negotiation Program.

On May 18, 2026, the U.S. Supreme Court declined to hear multiple pharmaceutical industry challenges to the Medicare Drug Price Negotiation Program established under the Inflation Reduction Act (IRA), denying their petitions for writ of certiorari and delivering a significant setback to manufacturers seeking to invalidate the program on constitutional grounds.

The Court denied petitions filed by several major manufacturers, including AstraZeneca, Novo Nordisk, Novartis, Bristol Myers Squibb, Johnson & Johnson (through Janssen Pharmaceuticals) and Boehringer Ingelheim, leaving intact lower court rulings that upheld the legality of the program.

Background of IRA Medicare Drug Price Negotiation Program

Enacted in 2022, the IRA authorized the Centers for Medicare & Medicaid Services (CMS) to negotiate “maximum fair prices” for certain high-expenditure drugs covered under Medicare. The program marked a shift in federal healthcare policy by permitting Medicare to directly negotiate prescription drug pricing for the first time.

The first negotiated prices for 10 drugs became effective in 2026, with additional products expected to be added annually.

The Industry’s Constitutional Challenges

Drug manufacturers challenged the IRA program on several constitutional grounds, arguing that it:

• Violates the Fifth Amendment by depriving manufacturers of property without just compensation and denying procedural due process;
• Violates the First Amendment by compelling manufacturers to characterize negotiated prices as “fair”; and
• Impermissibly delegates legislative authority to the executive branch.

Manufacturers also argued that participation in the program is effectively coercive because companies declining to participate may face significant excise taxes or exclusion from Medicare and Medicaid.

Federal appellate courts rejected those arguments, concluding that participation in Medicare remains voluntary and that the IRA framework does not violate constitutional protections. By denying certiorari without comment, the Supreme Court allowed those decisions to stand.

Key Takeaways

The IRA Negotiation Program Will Continue to Expand

The Supreme Court’s action strengthens the stability of the Medicare Drug Price Negotiation Program. CMS is expected to continue implementing future negotiation rounds involving additional high-cost and specialty medications.

Constitutional Challenges Face Significant Headwinds

Although the Supreme Court’s denial of review does not constitute a ruling on the merits, it signals continued judicial reluctance to invalidate the IRA’s core pricing framework on constitutional grounds.

However, additional litigation remains pending, including potential future disputes involving CMS implementation decisions, negotiation methodologies, administrative procedures and specific drug selections.

Potential Impact on Independent and Specialty Pharmacies

The decision also may have downstream implications for independent and specialty pharmacies.

Lower Medicare drug prices could improve patient affordability and adherence while potentially reducing inventory carrying costs for certain high-cost therapies. The IRA framework also may increase scrutiny of pharmacy benefit manager reimbursement practices and fuel continued calls for reimbursement transparency and acquisition-cost-based payment protections.

Looking Ahead

The Supreme Court’s refusal to intervene marks another milestone in the implementation of the IRA’s drug pricing reforms. Absent congressional action, the Medicare Drug Price Negotiation Program appears likely to remain a central feature of the federal healthcare landscape and a significant driver of pharmaceutical pricing and reimbursement strategy for manufacturers, pharmacy benefit managers, payors and pharmacies alike.

For More Information

If you have any questions about this Alert, please contact Jonathan L. Swichar, Bradley A. Wasser, Nikki Baniewicz, any of the attorneys in our Pharmacy Litigation Group or the attorney in the firm with whom you are regularly in contact.

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