Supreme Court Rejects Pharma Appeals, Upholding Medicare Drug Price Negotiations

The U.S. Supreme Court rejected appeals from six pharmaceutical companies seeking to dismantle the Medicare drug price negotiation program, allowing the initiative to remain in force. The companies—AstraZeneca, Johnson & Johnson, Bristol Myers Squibb, Novartis, Novo Nordisk, and Boehringer Ingelheim—argued the program violated constitutional protections against excessive fines, the taking of private property without just compensation, and free speech rights. They claimed the government coerces manufacturers into slashing prices through the threat of steep tax penalties rather than engaging in genuine negotiation.

The Trump administration defended the program in court, with Solicitor General D. John Sauer urging the justices to reject the appeals and arguing that participation in Medicare remains voluntary for manufacturers. The program, established under the 2022 Inflation Reduction Act during the Biden administration, authorizes the federal government to negotiate discounts on high-cost, top-selling treatments.

The court's refusal to hear the cases preserves current and upcoming negotiated discounts on treatments for cancer, heart disease, diabetes, and autoimmune diseases. Notably, 2027 discounts will apply to Novo Nordisk's weight-loss drugs Ozempic and Wegovy, which the government estimates will save $12 billion compared to 2024 list prices. The Centers for Medicare & Medicaid Services reported the program already reduced out-of-pocket costs by $1.5 billion in 2024.