Supreme Court rejects Big Pharma appeals

The U.S. Supreme Court on May 18 declined to hear a set of pharmaceutical industry appeals aimed at stopping Medicare’s drug price negotiation program, leaving the policy intact after lower courts rejected the companies’ claims. The justices did not comment in denying review, according to the court’s orders page. The cases had been brought by some of the world’s largest drugmakers after the federal government selected their products for negotiated prices under the Inflation Reduction Act of 2022. (usnews.com) The ruling keeps in place a program that has already moved from litigation into implementation, with the first negotiated prices taking effect this year. (cms.gov) ### Which companies asked the Supreme Court to step in? Reuters reported that the justices turned away appeals by Novo Nordisk, AstraZeneca, Janssen Pharmaceuticals, Bristol Myers Squibb, Novartis and Boehringer Ingelheim. Those companies had challenged different parts of the Medicare negotiation system after CMS targeted their drugs for price curbs. Bristol Myers Squibb’s petition asked the court to review whether the program violated the Fifth Amendment’s takings clause and the First Amendment by requiring manufacturers to “agree” to a government-set “maximum fair price,” according to SCOTUSblog and the company’s petition docket. (supremecourt.gov) Boehringer Ingelheim’s petition raised First and Fifth Amendment claims as well, SCOTUSblog shows. ### What exactly did the court do on May 18? The Supreme Court issued an order list dated May 18, 2026, and its orders page says most cases are disposed of through unsigned orders that can deny certiorari without comment. In these cases, that meant the court left standing lower-court rulings that had rejected the manufacturers’ arguments. (usnews.com) The justices’ action was procedural, not a merits ruling after argument. The effect, though, was immediate: the legal path the companies were pursuing at the Supreme Court closed, and the administration’s implementation of the program continued. That is an inference from the denial of review and CMS’s ongoing program materials. (scotusblog.com) ### How does the Medicare negotiation program work? The Inflation Reduction Act of 2022 required the Health and Human Services secretary to negotiate prices with drug companies for certain high-cost drugs covered under Medicare Part B and Part D, KFF says. CMS describes the negotiated prices as “maximum fair prices” in the statute. (supremecourt.gov) Reuters reported that manufacturers must negotiate directly with CMS or withdraw all of their drugs from Medicare and Medicaid, and failure to reach an agreement can trigger steep daily excise taxes. Drugmakers argued in court that the system was not a true negotiation but a form of government-imposed price control. (supremecourt.gov) ### What has already taken effect? CMS said the first negotiated prices for 10 Medicare Part D drugs went into effect on January 1, 2026. KFF said the program is now in its third cycle, with a second set of 15 Part D drugs due to take effect in 2027 and another 15 Part B and Part D drugs selected in 2026 for prices that would take effect in 2028. (kff.org) KFF said the 40 drug products selected for negotiation so far accounted for 36% of total Medicare spending on drugs covered under Part B and Part D in 2024, or $125 billion out of $350 billion. CMS and KFF have both said the negotiated prices are expected to produce several billion dollars in net savings to Medicare. (usnews.com) ### Why did the cases continue under President Donald Trump? Reuters reported that President Donald Trump’s administration defended the program in court even though it was enacted under former President Joe Biden. CMS Administrator Mehmet Oz said in January that the agency was taking action to target the most expensive drugs in Medicare, according to Reuters. (cms.gov) The named respondent in at least one of the Supreme Court cases was Robert F. Kennedy Jr., the health secretary, reflecting the change in administration while the litigation was pending. The Bristol Myers Squibb docket lists the case as Bristol Myers Squibb Company v. (kff.org) Robert F. Kennedy, Secretary of Health and Human Services. ### What happens next in the program? CMS said on March 13, 2026, that manufacturers of all 15 drugs selected for the third cycle chose to participate in the negotiation program. CMS says those negotiations will occur in 2026 and any negotiated prices from that round will take effect in 2028. (usnews.com) January 1, 2027, is the next major implementation date in public program documents. That is when negotiated prices for the second set of 15 Part D drugs are scheduled to take effect, according to CMS and KFF. (kff.org) (cms.gov) (supremecourt.gov)