US Supreme Court Rejects Pharma Challenge to Biden Drug Price Rule

• Six companies (Novo Nordisk, AstraZeneca, Janssen, Bristol Myers Squibb, Novartis, and Boehringer Ingelheim) had argued the program violates constitutional rights including Fifth Amendment protections and First Amendment free speech guarantees
• The first negotiated prices on 10 drugs went into effect in 2026, with the program requiring drugmakers to negotiate maximum prices with CMS or face steep daily excise taxes and potential withdrawal from Medicare programs
• The Trump administration is continuing to defend the Biden-era mechanism, with CMS Administrator Mehmet Oz citing it as part of efforts to reduce prescription drug costs for Medicare beneficiaries

US Supreme Court Rejects Pharma Challenge to Biden Drug Price Rule

The U.S. Supreme Court declined Monday to hear appeals from six major pharmaceutical companies challenging Medicare's drug price negotiation program, a key component of Biden's 2022 Inflation Reduction Act. The Trump administration is now defending the Biden-era mechanism.

Key Companies Affected:

Novo Nordisk, AstraZeneca, Janssen Pharmaceuticals, Bristol Myers Squibb, Novartis, and Boehringer Ingelheim all had their appeals rejected. The Court upheld lower court decisions from the 3rd and 2nd Circuit Courts of Appeals that sided with the government.

Program Details:

The law requires drugmakers to negotiate maximum prices for high-expenditure Medicare drugs directly with the Centers for Medicare & Medicaid Services (CMS) or face steep daily excise taxes and potential withdrawal from Medicare programs. The first negotiated prices for 10 drugs took effect this year, targeting medications with the highest costs for Medicare, which serves Americans 65 and older.

Legal Arguments:

Pharmaceutical companies argued the program constitutes government-dictated price controls rather than true negotiation, violating multiple constitutional provisions including Fifth Amendment due process and property rights, First Amendment free speech protections, and separation of powers principles.

Market Implications:

The ruling solidifies federal authority to negotiate drug prices, potentially reducing costs for Medicare beneficiaries through lower out-of-pocket payments and premiums. Americans currently pay more for pharmaceuticals than any other nation. The decision represents a significant setback for the pharmaceutical industry's efforts to block price controls and could impact future drug pricing strategies and profit margins for major drugmakers.

CMS Administrator Mehmet Oz emphasized the Trump administration's commitment to targeting expensive Medicare drugs.