On August 26, 2026, the U.S. Court of Appeals for the Fifth Circuit rejected PhRMA’s constitutional challenge to Medicare’s drug-price negotiation program, affirming a lower-court victory for the government.
The court ruled that drugmakers do not have a protected right to sell medicines to Medicare at a preferred price because participation in Medicare—and therefore the negotiation program—is voluntary.
The panel rejected PhRMA’s arguments that Congress delegated excessive pricing authority, that the Inflation Reduction Act’s excise tax is an unconstitutional excessive fine, and that the process violates due process.
The ruling adds to the pharmaceutical industry’s losing streak:
multiple federal courts have upheld the program, and the Supreme Court declined in May 2026 to hear several related challenges.
PhRMA can potentially seek Supreme Court review, but the decision makes a broad judicial invalidation of Medicare negotiation increasingly unlikely. The industry may instead focus on narrower challenges involving specific drugs or implementation details.
Sources:
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