Drug prices & Part D
Federal Appeals Court Rejects Drug Manufacturer's Challenge to Medicare Price Negotiation Program
The U.S. Court of Appeals for the D.C. Circuit dismissed a pharmaceutical company's lawsuit arguing that the Medicare drug price negotiation program is unconstitutional, continuing a series of judicial losses for industry opponents of the program.
By the Goodsurance editorial teamAugust 28, 2026
The U.S. Court of Appeals for the D.C. Circuit ruled in late August 2026 against a drug manufacturer's constitutional challenge to the Medicare drug price negotiation program. The court dismissed the case, concluding that participation in Medicare is voluntary and that manufacturers who choose to sell their products through the program cannot claim the negotiation process constitutes an unconstitutional taking or compelled speech. The ruling continued a pattern of federal courts rejecting pharmaceutical industry efforts to stop Medicare from negotiating prices directly with drug companies on a selected list of high-cost medications. The negotiation program was established under the Inflation Reduction Act and first produced lower prices for 10 drugs that took effect in 2026. A third negotiation cycle covering 15 drugs, including the first drugs payable under Medicare Part B, is currently underway, with negotiated prices targeted to take effect January 1, 2028. The D.C. Circuit decision adds to prior rulings from multiple federal circuits that have sided with the government. No federal appellate court has found the negotiation program unconstitutional. The Supreme Court declined to take up earlier pharmaceutical industry appeals in May 2026.
A federal appeals court dismissed another challenge to Medicare drug price negotiation. All legal challenges to the program have been rejected so far.
In plain words
A federal appeals court said Medicare can keep negotiating lower drug prices. A drug company went to court and argued the program was against the Constitution. The court disagreed. Courts have rejected every legal challenge to this program so far. The program already lowered prices on 10 drugs in 2026. More negotiations are underway for drugs that would be cheaper starting in 2028.
Understand the basics first
Source: U.S. Court of Appeals, D.C. Circuit
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