Federal Appeals Court Rejects Drug Manufacturer's Challenge to Medicare Price Negotiation Program

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.