Supreme Court Rejects Drugmakers’ Challenge to Medicare Price Negotiations

AARP, consumer groups hail high court’s decision that continues cost-cutting, money-saving talks

Tony Pugh,

AARP

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Published May 18, 2026

A close-up of a legal gavel with blurred prescription medication bottles in the background.

Getty Images

Key takeaways

Supreme Court refuses to hear drugmaker appeals.
Medicare negotiated drug prices debuted this year.
Lawsuits tried to sink Medicare bargaining.
AARP lauds high court’s decision to skip appeals.

In a victory for older Americans and their budgets, the Supreme Court declined to hear a drug industry challenge of a 2022 law — long backed by AARP — that allows Medicare to negotiate prices on certain high-cost prescriptions.

The court’s order left in place lower court decisions that previously rejected legal challenges to the Medicare drug negotiation program, a key provision of the Inflation Reduction Act of 2022.

The law authorizes Medicare to negotiate lower drug prices with pharmaceutical companies on expensive and widely used medications. It also requires manufacturers to pay a rebate to Medicare if they raise a price by more than the general rate of inflation.

“AARP fought hard for this new law giving Medicare the power to negotiate lower drug prices because no American should ever have to choose between filling a prescription and paying for groceries, rent, or other basic necessities,” says Bill Sweeney, AARP senior vice president of government affairs.

Lower negotiated prices debuted this year

The first round of Medicare drug price negotiations in 2024 produced lower prices for 10 medications. Those took effect Jan. 1, 2026.

The prescriptions include treatments for arthritis, blood clots, cancer, diabetes, heart failure and kidney disease. As a result, Part D enrollees are expected to save $1.5 billion in out-of-pocket costs this year.

Lower prices that Medicare already has negotiated on 15 additional drugs take effect Jan. 1, 2027. About 5.3 million beneficiaries used these drugs in 2024, accounting for $42.5 billion in Part D spending in 2024.

An additional 15 medications that treat arthritis, cancer, Crohn’s disease, diabetes and HIV are part of this year’s third round of bargaining. The lower prices will be released by Nov. 30 and will take effect Jan. 1, 2028.

As many as 20 more drugs every year will be selected going forward.

Drug industry targets provision in 2022 law

But since June 2023, a flurry of lawsuits from drug makers, most unsuccessful so far, have challenged the Medicare drug negotiation program on a number of constitutional and statutory issues. Generally, the challenges claim the program violates the First, Fifth, and Eighth amendments of the U.S. Constitution.

On Monday, the justices rejected appeals of unsuccessful lower court rulings from AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Janssen Pharmaceuticals, Novartis and Novo Nordisk.

Their “denial of these petitions brings an end to these six companies’ efforts to dismantle the Medicare Negotiation program,” says Michael Lieberman, counsel for Patients For Affordable Drugs at Fairmark Partners LLP.

“Six of the largest pharmaceutical companies in the world, represented by some of the largest law firms in the world, raised a wide variety of legal arguments against the program,” he says. “Now, courts at all three levels of the federal system have uniformly rejected those arguments, confirming that pharma companies do not have a constitutional right to charge the government exorbitant prices for prescription drugs.”

AARP has battled for right to negotiate prices

In addition to AARP’s long-fought advocacy for the 2022 law, AARP and AARP Foundation have filed numerous amicus briefs defending the law against challenges brought by drug companies, underscoring the harm older Americans would face if the negotiation program were struck down. Others were equally jubilant.

“After repeated losses in the lower courts, drugmakers asked the Supreme Court to step in — and the court declined,” says Merith Basey, CEO of Patients For Affordable Drugs. “The focus now must be on full implementation and continued expansion [of the negotiation program], making sure more drugs are included in negotiations and that savings reach more Americans who need them.”

Almost 3 in 5 adults 50 and older are concerned about the cost of prescription drugs, according to a December 2024 AARP survey that included both people of Medicare age and younger. And 96 percent believe the government should do more to lower pharmaceutical prices.

That survey was taken right before a new $2,000 cap on out-of-pocket prescription drug expenses took effect in 2025. The cap rose to $2,100 for 2026.

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Tony Pugh is an award-winning writer and editor covering Medicare for AARP. He has also covered Medicare for Bloomberg Law and as a national correspondent for Knight Ridder/McClatchy Newspapers.