Supreme Court Denies Certiorari for Drug Price Negotiation Program

TL/DR –

On May 18, the US Supreme Court rejected all six petitions filed by drug manufacturers contesting the Independent Regulatory Authority’s (IRA) Medicare Drug Price Negotiation Program. The manufacturers’ basis for these lawsuits ranged from constitutional and statutory theories, including allegations under the Due Process Clause, the Eighth Amendment’s Excessive Fines Clause, and the Administrative Procedure Act. Despite the lawsuits, the US government has won every case both in trial and appellate courts, effectively ending the first wave of lawsuits against the IRA’s program.

Supreme Court Denies Drug Manufacturers’ Challenges to Medicare Drug Price Negotiation Program

On May 18, the Supreme Court dismissed six certiorari petitions filed by drug manufacturers against the Internal Revenue Agency (IRA)’s Medicare Drug Price Negotiation Program, marking a significant setback in the series of constitutional challenges.

Manufacturers began filing lawsuits before the announcement of the first ten negotiation-eligible drugs in late August 2023. The lawsuits encompassed a broad range of constitutional and statutory theories, including violations of the Due Process Clause, the Takings Clause, the First Amendment, the Eighth Amendment’s Excessive Fines Clause, and the Administrative Procedure Act. You can find more details about these legal challenges here.

So far, the government has come out on top in all the cases that reached verdicts in both the trial and appellate courts. The Third Circuit issued the first appellate decision, upholding the district court’s rejection of AstraZeneca’s procedural due process challenge. The court ruled that manufacturers do not have a property right to sell their products or demand government reimbursement at specific prices. Subsequently, the Second Circuit affirmed the dismissal of Boehringer Ingelheim’s claims on similar grounds. More details about these decisions can be found here and here.

All manufacturers submitted petitions to the Supreme Court for review. However, they were all denied, indicating that the manufacturers did not secure the minimum four votes needed for certiorari.

Implications of Supreme Court’s Denial

This denial essentially puts an end to the first wave of constitutional challenges. Just two cases from this wave remain pending – one in the Fifth Circuit and another in the D.C. federal court. As the Negotiation Program continues to identify its second and third wave of drugs, new lawsuits have been filed, with one already on appeal in the D.C. Circuit. A ruling in favor of the manufacturers in either of these cases could potentially create a circuit split, providing the Supreme Court with a reason to intervene.

The information in this article is meant to serve as a general guide. Seek expert advice for your specific circumstances.

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