Boehringer Ingelheim Pharmaceuticals, Inc. v. Department of Health and Human Services, et al.

The Inflation Reduction Act of 2022 established the “Medicare Drug Price Negotiation Program,” which imposes new, top-down mandates for leading prescription drugs. The Centers for Medicare and Medicaid Services (“CMS”) selects drugs for the Program and sets a below-market “maximum fair price” for each selected drug. Manufacturers must then provide Medicare beneficiaries “access” to the drugs at that price and attest that they “negotiate[d]” and “agre[e]” to CMS’s terms. Failing to comply subjects manufacturers to severe sanctions—billions of dollars in annual tax penalties or complete exclusion from Medicare and Medicaid, which account for nearly half the U.S. prescription drug market. The Second Circuit upheld the Program, but it never engaged with the substance of Petitioner Boehringer Ingelheim Pharmaceuticals, Inc.’s constitutional claims. The court instead held that the Program cannot violate the First or Fifth Amendments because it is “voluntary”: A manufacturer can “choose” to avoid the Program’s mandates by incurring crippling tax penalties or withdrawing its entire drug portfolio from Medicare and Medicaid. The questions presented are:

1. Is the Program immune from scrutiny under the First and Fifth Amendments because it relies on economic coercion to secure participation?

2. Does the Program unconstitutionally condition Medicare and Medicaid participation on manufacturers giving up their constitutionally protected speech, property, and due process rights?