The U.S. Supreme Court on Monday declined to hear a pharmaceutical industry challenge to the Medicare drug price negotiation program created under former President Joe Biden’s Inflation Reduction Act, according to Reuters.
The justices rejected appeals from drugmakers including Novo Nordisk (NYSE:NVO), AstraZeneca Plc’s (NASDAQ:AZN), Bristol-Myers Squibb Co. (NYSE:BMY), Novartis (NYSE:NVS) and Janssen Pharmaceuticals, a unit of Johnson & Johnson (NYSE:JNJ), leaving lower-court rulings in favor of the federal government in place.
The companies argued the program imposed government-dictated price controls and threatened innovation. Reuters reported that the drugmakers also claimed the policy violated constitutional protections for due process, free speech and property rights.
The Medicare negotiation framework allows the Centers for Medicare & Medicaid Services, or CMS, to negotiate prices directly with manufacturers for certain high-cost medicines covered under Medicare. Companies that refuse to participate could face steep excise taxes or withdraw products from Medicare programs.
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