Federal appeals courts delivered decisive blows to pharmaceutical industry efforts to overturn Medicare's drug price negotiation program, with two separate circuit courts rejecting constitutional challenges within 24 hours. The rulings represent the latest setbacks for drugmakers attempting to block the Biden administration's flagship healthcare cost reduction initiative, which the Trump administration has continued.
Second Circuit Rejects Boehringer Constitutional Claims
The U.S. Court of Appeals for the Second Circuit affirmed a district court's dismissal of all constitutional claims brought by Boehringer Ingelheim Pharmaceuticals against the Medicare Drug Price Negotiation Program. The company had challenged the program on multiple constitutional grounds, alleging violations of Fifth Amendment procedural due process rights, illegal physical taking of its diabetes drug Jardiance, compelled speech under the First Amendment, excessive fines under the Eighth Amendment, and unconstitutional conditioning of Medicare participation.
The appellate court rejected these arguments, explaining that constitutional claims fail because participation in the program is voluntary, the government does not regulate Boehringer's conduct in the private market, and the Inflation Reduction Act expressly authorized the Centers for Medicare and Medicaid Services to implement the program during its first three years without following standard notice-and-comment rulemaking procedures.
Boehringer had filed its original challenge in August after learning that Jardiance (empagliflozin), developed jointly with Eli Lilly, was among the first 10 medicines subject to Medicare pricing negotiations. The company subsequently committed to participating in the first round of negotiations, with new prices set to be announced September 1, 2024, and taking effect January 1, 2026.
Chamber of Commerce Appeal Fails on Standing Grounds
In a separate ruling, the U.S. Court of Appeals for the Sixth Circuit dismissed the U.S. Chamber of Commerce's challenge to the negotiation program, upholding a district court's determination that the case was filed in improper venue and that regional chambers lacked standing to bring the lawsuit.
The Sixth Circuit agreed that the interests in the lawsuit were "not germane to the purposes of the regional chambers" named as plaintiffs and that they failed to demonstrate associational standing. The court noted that while regional arms of national organizations may sometimes establish standing, the specific circumstances here did not support such a finding.
The Chamber had argued that the program cannot be characterized as voluntary negotiation since affected companies face excise taxes starting at 65% of U.S. sales for refusing to participate, increasing by 10% quarterly until reaching a maximum of 95%. The organization contended this creates a mandatory pricing control regime disguised as negotiation.
Industry Pattern of Legal Defeats
These appellate defeats continue a pattern of unsuccessful legal challenges by the pharmaceutical industry. Previous court losses include cases brought by Bristol-Myers Squibb, Johnson & Johnson, AstraZeneca, the Pharmaceutical Research and Manufacturers of America trade organization, and the U.S. Chamber of Commerce at the district court level.
Patient advocacy group Patients for Affordable Drugs celebrated the rulings, with Executive Director Merith Basey calling the Sixth Circuit decision "the 10th court ruling in favor of patients and against the pharmaceutical industry's desperate legal attacks on the overwhelmingly popular Medicare Negotiation Program."
Program Implementation Continues
Despite ongoing legal challenges, the Medicare negotiation program continues its implementation timeline. The first 10 drugs were selected in 2023, with negotiated prices becoming applicable in 2026 and expected to benefit more than 9 million patients. On March 14, 2025, CMS announced that agreements have been signed with drug companies manufacturing all 15 drugs selected for the second cycle of negotiation, with those prices taking effect in 2027.
The U.S. Chamber of Commerce indicated it is reviewing the Sixth Circuit decision and "considering next steps." Deputy Chief Counsel Andrew Varcoe stated, "While we support affordable health care, the price controls that we are challenging would reduce access to new medicines that Americans are counting on, and would set a devastating precedent for all U.S. businesses."
