Two federal courts—one in New Jersey, one in Delaware—recently rejected constitutional and statutory challenges against the Inflation Reduction Act's (IRA) Medicare Drug Negotiation Program, brought by pharmaceutical manufacturers including AstraZeneca and Bristol Myers Squibb15.
On May 8, 2025, the Third Circuit appellate court upheld the lower court's dismissal of AstraZeneca's challenge, ruling that the Medicare negotiation provisions do not violate procedural due process and that drug manufacturers have no property right to sell drugs at a government-set price5.
Courts found that participation in Medicare is voluntary, undermining the manufacturers' argument that the negotiation program is coercively unconstitutional15.
Statutory claims were also dismissed because the IRA precludes administrative or judicial review of certain CMS decisions about which drugs are selected for negotiation; thus, courts found they lacked jurisdiction to hear some claims1.
Plaintiffs (such as Novo Nordisk) failed to show standing in some cases because they could not demonstrate concrete, specific injury linked to CMS actions or that the court could properly redress their grievances13.
These decisions represent the government's first significant appellate victories defending the IRA's drug negotiation provisions and may affect litigation in additional pending cases15.
Sources:
1. https://www.jdsupra.com/legalnews/mintz-ira-update-a-circuit-win-and-the-5479745/
3. https://www.mintz.com/insights-center/viewpoints/2146/2024-07-15-mintz-ira-update-ira-litigation-update-courts-begin
5. https://www.mintz.com/insights-center/viewpoints/2146/2025-05-12-appeals-court-rejects-astrazenecas-challenge-medicare