SCOTUS Denies Cert to Pharma Industry Challenges to IRA’s Negotiation Program, USAA’s Section 101 Patent Appeal

Today, the U.S. Supreme Court issued an order list denying a series of petitions for writ of certiorari filed by major pharmaceutical developers to challenge the Medicare negotiation program established by the Inflation Reduction Act (IRA). The Supreme Court also denied cert to an appeal of Section 101 patent-eligibility issues from a Federal Circuit ruling involving mobile banking technology, as well as a pro se cert appealing copyright and intentional infliction of emotional distress (IIED) against Disney.

Enacted by Congress in August 2022, the IRA established a Drug Price Negotiation Program codified at 42 U.S.C. § 1320f that establishes maximum prices to be paid by the U.S. government for drugs eligible for Medicare Part B or Part D coverage. Though styled as a voluntary process, pharmaceutical firms have raised issues with excise taxes for noncompliance that, by some measures, reach as high as 1900% of daily sales. Several drugmakers as well as the U.S. Chamber of Commerce filed suit to oppose the program based on several constitutional claims, including due process and takings claims under the Fifth Amendment and compelled speech claims under the First Amendment.

Despite the chilling effects on new drug development being reported by pharmaceutical executives, legal challenges to the IRA’s negotiation program continue to fail. In August 2025, both Boehringer Ingelheim and the U.S. Chamber of Commerce lost out on their respective appeals, with Boehringer failing to prove its constitutional claims and the U.S. Chamber case being tossed for lack of associational standing. In the months following those rulings, appeals from Teva Pharmaceuticals, Novo Nordisk, and both Janssen Pharmaceuticals and Bristol Myers Squibb (BMS) appealing jointly were all nixed by circuit courts, with only one circuit judge authoring in dissent that the IRA’s negotiation program constituted an unconstitutional taking under the Fifth Amendment. This March, the U.S. Solicitor General filed a brief urging the Supreme Court to deny the constitutional claims in at least Janssen and BMS’ case.

First and Fifth Amendment Claims Raised by Drug Developers Fail Across the Board

AstraZeneca’s cert petition asked the Supreme Court if the IRA implicates an interest for pharmaceutical manufacturers protected by the Fifth Amendment’s Due Process Clause. The drugmaker had appealed from a Third Circuit ruling issued last May holding that AstraZeneca had not articulated a protected property interest in its ability to sell Medicare Part B and Part D drugs at market rates. The appellate court reasoned that the company had not articulated a concrete and particularized injury to its current business activities surrounding the diabetes drug Farxiga, and that the IRA’s negotiation program does not impact private market transactions.

In its cert petition, AstraZeneca asserted that it had a right to sell patented pharmaceuticals like Farxiga at market rates to the 68 million Americans enrolled in Medicare. The Third Circuit “fundamentally misunderst[ood] the IRA’s radical design,” which gives the Centers for Medicare & Medicaid Services (CMS) authority to set prices for transactions with private insurers to which the government is not a party. AstraZeneca argued that the Third Circuit’s ruling contravened the Supreme Court’s 1944 decision in Bowles v. Willingham, in which the Court upheld a wartime rent-fixing statute because that statute gave landlords a right to appeal decisions, while drugmakers have no recourse for judicial review of prices established under the IRA’s negotiation program.

Another Third Circuit appeal came to the Supreme Court from Janssen Pharmaceuticals and BMS, both of which filed cert petitions challenging the IRA’s negotiation program under the Fifth Amendment’s Takings Clause and as compelling speech in violation of the First Amendment. Last September, the Third Circuit dismissed these claims by finding no physical taking violating the Fifth Amendment after ruling that the IRA’s negotiation program was voluntary, which also dismantled the drugmakers’ First Amendment argument with the appellate court finding only an incidental effect on speech.

Both Janssen and BMS continued their First and Fifth Amendment arguments in their cert petitions filed with the Supreme Court, with Janssen raising an additional challenge that the act constitutes economic coercion. In their cert petitions, Janssen noted that it could be liable for excise taxes approaching $600 million per day for refusing to sell blood clot treatment Xarelto at prices set by CMS, while BMS feared facing up to $1 billion per day in liability. Janssen’s petition argued that Supreme Court precedent including National Federation of Independent Business v. Sibelius (2012) prevents Congress from using economic coercion to bypass constitutional rights.

Today’s order list included a cert denial for Novo Nordisk, which appealed another Third Circuit ruling raising a separation of powers challenge to the IRA’s negotiation program. The Court also denied a similar cert petition filed by Boehringer Ingelheim, which challenged the Second Circuit’s conclusion that the IRA’s negotiation program was voluntary and asked whether the U.S. government defining the scope and setting terms of a voluntary federal program violated the unconstitutional conditions doctrine.

Supreme Court Denies Yet Another Cert Petition Seeking Section 101 Review

The Supreme Court also denied a cert petition filed by United Services Automobile Association (USAA), which was appealing an adverse ruling on 35 U.S.C. § 101 patent-eligibility ruling by the Federal Circuit issued last June. According to USAA’s petition, the CAFC systematically misapplies Supreme Court precedent on patent-ineligible abstract ideas in large part because it cannot properly define what constitutes such an abstract idea. Due to this, the Federal Circuit’s Section 101 jurisprudence has expanded well beyond the unpatentable categories of fundamental economic practices and fundamental truths identified in cases like Alice v. CLS Bank (2014), according to USAA’s petition.

Finally, the Court denied a pro se petition from Alejandro Evaristo Perez, who appealed the Fifth Circuit’s April 2024 ruling affirming the dismissal of Perez’s complaint against Disney alleging claims of copyright infringement, IIED and restraint of trade. Perez’s petition notes that he sought a $230 million settlement payment from Disney and accused federal judges of engaging in unlawful conspiracy by entering rulings adverse to Perez’s copyright claims.