The Fifth Circuit Court of Appeals rejected the pharmaceutical industry's lead trade group's constitutional challenge to Medicare's drug price negotiation program, marking what advocates call the 25th consecutive courtroom defeat for the industry's legal campaign.
The U.S. Court of Appeals for the Fifth Circuit on Wednesday affirmed a lower court's summary judgment against the Pharmaceutical Research and Manufacturers of America, or PhRMA, which had argued the Medicare negotiation program created under the Inflation Reduction Act violated its members' due process rights. The three-judge panel was unpersuaded.
The ruling lands a clean blow to the pharmaceutical lobby's most prominent remaining legal challenge and extends an unbroken streak of courtroom losses for an industry that has spent years and, by its opponents' own description, millions of dollars trying to dismantle the program through litigation rather than legislation.
The Fifth Circuit's reasoning cut to the core of PhRMA's argument. The trade group contended that the negotiation program, which allows the federal government to negotiate prices on certain high-cost drugs covered by Medicare, deprived drugmakers of a constitutionally protected interest. The court disagreed.
From the ruling, as The Hill reported:
"We conclude that manufacturers lack a protected interest in selling to Medicare beneficiaries at a preferred price because participation in Medicare and Medicaid, and thus in the Program, is voluntary."
The court acknowledged the "financial importance" of drugmakers being able to sell medications to Medicare patients. But it drew a firm line: financial pressure is not the same as coercion, and no company is forced to participate in the government program.
That reasoning echoed the lower court's decision. U.S. District Judge David Alan Ezra had dismissed PhRMA's lawsuit the previous year, ruling that the trade group's members could not show the program stripped them of a protected interest. Judge Ezra found that the due process claim "fails as a matter of law."
PhRMA is not the only entity that has tried and failed to stop the negotiation program in court. The U.S. Chamber of Commerce, along with individual drugmakers Boehringer Ingelheim, AstraZeneca, and Merck, have all brought their own legal challenges. None has won. And in May, the Supreme Court declined to take up a petition from drugmakers challenging the program, closing off another avenue.
Patient advocacy groups wasted no time framing the ruling as further proof that the pharmaceutical industry's courtroom strategy has reached a dead end. Emma Sands, director of media and communications at Patients For Affordable Drugs, issued a statement:
"PhRMA has been at the center of the industry's years-long, multi-million-dollar legal campaign to overturn Medicare negotiation. Now, they've lost one of their most significant challenges to the program to date. The Fifth Circuit rejected this sweeping constitutional attack, delivering the 25th courtroom victory for Medicare negotiation and the patients who fought for it."
Peter Maybarduk, access to medicines director at Public Citizen, a consumer rights nonprofit, put it more bluntly:
"For years, drugmakers sought to sow doubt and find a sympathetic court, fighting something everyone wants, which is affordable medicine and a government that negotiates aggressively on Americans' behalf. They failed."
The Hill reached out to PhRMA for comment on the ruling. No response was noted.
On its face, the ruling looks like a straightforward win for taxpayers and seniors who want lower drug costs. And twenty-five consecutive courtroom losses suggest the pharmaceutical industry's legal arguments are not gaining traction with judges across the ideological spectrum, the Fifth Circuit, after all, is hardly a bastion of progressive jurisprudence.
But the question conservatives ought to ask is whether the program, once fully operational, actually delivers on its promise, or whether government-set prices end up raising costs and restricting access through back-door mechanisms that never show up in a courtroom brief. Price controls have a long track record of producing shortages and stifling innovation, regardless of what courts say about their legality.
The legal question is settled, or close to it. The policy question is not. The Inflation Reduction Act's negotiation program was a signature piece of the Biden-era legislative agenda, and the Trump administration has already moved to unwind other Biden-era Medicare subsidies after costs ballooned beyond projections. Whether this program follows a similar trajectory depends on outcomes, not opinions.
Courts can tell you a program is constitutional. They cannot tell you it works. That distinction matters more now than any appellate ruling.
