Blog Post | 114 KY. L. J. ONLINE | October 30, 2025
Non-Negotiable: Why SCOTUS must uphold Medicare’s drug-negotiation program
By: Will Stansell, Staff Editor, Vol. 114
Lynn Scarfuto, a Medicare beneficiary from Herkimer, NY, awakens each day facing a terrifying reality: her ability to afford her cancer treatment and stay alive is entirely dependent upon her fragile financial status.[1] As do many Americans, she relies on the drug Imbruvica to fight aggressive forms of blood cancer like leukemia and lymphoma.[2] Congress created a program to ease the crushing financial toll of cancer treatment, but this program now faces mounting legal challenges, and the Supreme Court may soon decide its fate. To protect patients and ensure affordability, the court must uphold this program.
For years, high drug costs forced many Medicare beneficiaries to make the impossible choice between affording their daily life and their life-saving cancer treatment.[3] Prior to the introduction of the Inflation Reduction Act (IRA) in 2022, there were four complex “phases” a patient would endure to continue receiving their treatment.[4] The IRA provided valuable clarity and partial easing of the financial burden to beneficiaries.[5]
As of 2025, there are now three phases to this process. After first paying up to a $590 deductible, patients then typically pay twenty-five percent coinsurance for their drugs until their total out-of-pocket (OOP) spending reaches $2,000 for the year.[6] Before the introduction of the IRA and the OOP cap, an additional phase existed at this step, during which enrollees continued to face thousands of dollars in costs.[7] Because of Imbruvica’s staggering list price, patients today still often meet the $2,000 cap from their first prescription. The final phase is ominously referred to as the Catastrophic Phase.[8] In pre-IRA days, the system charged enrollees five percent of the drug costs until all payers involved combined to meet a threshold of $7,400.[9] The OOP cap relieves patients of this extra financial barrier, shifting these costs predominantly to insurers, manufacturers, and Medicare.[10]
In 2022, the IRA aimed to alleviate some of the financial burdens of prescription drugs by introducing vital out-of-pocket caps and price negotiations for specific medications, to be determined by the Centers for Medicare and Medicaid Services (CMS).[11] Prior to the IRA, Medicare Part D included a “noninterference clause” which prevented the government from (1) interfering with negotiations between pharmacies and manufacturers, and (2) instituting specific price structures.[12] The IRA amended this “by adding an exception that requires the Secretary of HHS to negotiate prices with drug companies for a small number of single-source brand-name drugs”.[13] Once the new prices are officially in place, negotiation will reduce Imbruvica’s monthly list price by thirty-eight percent from $14,934 to $9,139.[14]
The relevant legal battle revolves around this drug-negotiation program. Challengers to the law have claimed violations of the First Amendment, the Due Process and Takings clauses of the Fifth Amendment, the Eighth Amendment, the Nondelegation Doctrine, and the Spending Clause.[15] Lower courts have firmly rejected each claim, notably concluding that participation in Medicare is voluntary and that the law does not unconstitutionally compel protected speech.[16] However, the prominent drug manufacturer AstraZeneca has petitioned the Supreme Court to review the Third Circuit’s rejection of its claims.[17] While the lower courts’ reasonings seem legally sound, the current Supreme Court has not been a stranger to the contrarian path of rejecting what seemed like a consensus among lower courts.[18] If there is any hope of preserving the effort to make life-saving drugs more affordable to patients, the Supreme Court must uphold this drug negotiation program.
The OOP cap works in tandem with the drug negotiation provision. As discussed, the system primarily passes the remaining price of these drugs on to insurers who have contracted with the government.[19] Whereas Medicare Parts A and B are often free if eligibility requirements are met, private insurers administer Part D (prescription drug coverage) and charge monthly premiums.[20] If the Supreme Court removes the negotiation program while the $2,000 OOP cap remains, insurers would be on the hook for a much higher drug cost.[21] To absorb these costs, insurers would likely pass them along to patients through higher premiums to remain financially viable. Our senior citizens, many of whom live on fixed incomes, would once again be relegated to that perpetual state of the impossible financial choice.[22]
Of course, an analysis of the necessary reforms needed concerning insurance providers would be well warranted at another time, but an indictment of one player does not negate the responsibility of another. Today, optimism remains that this critical program will persist and continue saving lives.
[1] See Patients for Affordable Drugs, The Burden of Cancer Drug Prices On Patients. The Relief in the Inflation Reduction Act 9 (2023).
[2] Id.
[3] Id.
[4] Juliette Cubanski & Tricia Nueman, Changes to Medicare Part D in 2024 and 2025 Under the Inflation Reduction Act and How Enrollees Will Benefit, Kaiser Fam. Found. (Apr. 20, 2023), https://www.kff.org/medicare/changes-to-medicare-part-d-in-2024-and-2025-under-the-inflation-reduction-act-and-how-enrollees-will-benefit/.
[5] Final CY 2025 Part D Redesign Program Instructions Fact Sheet, Centers for Medicare and Medicaid Services (Apr. 1, 2024) https://www.cms.gov/newsroom/fact-sheets/final-cy-2025-part-d-redesign-program-instructions-fact-sheet.
[6] Id.
[7] Cubanski & Neuman, supra note 4.
[8] Id.
[9] Id.
[10] Final CY 2025 Part D Redesign Program Instructions Fact Sheet, supra note 5.
[11] See Patients for Affordable Drugs, The Burden of Cancer Drug Prices On Patients. The Relief in the Inflation Reduction Act, supra note 1.
[12] Cubanski & Neuman, supra note 4.
[13] Id.
[14] Elisa Becze, Ibrutinib Costs Drop 38% Under Medicare Price Negotiations, Oncology Nursing Soc’y (Aug. 16, 2024), https://www.ons.org/publications-research/voice/advocacy/08-2024/ibrutinib-costs-drop-38-under-medicare-price#:~:text=CMS%20negotiated%20price%20reductions%20for,Services%20Secretary%20Xavier%20Becerra%20said.
[15] Hannah-Alise Rodgers, Cong. Rsch. Serv., R47682, Constitutional Challenges to the Medicare Drug Price Negotiation Program, (2024).
[16] Id.
[17] Joseph Choi, Astrazeneca Asks Supreme Court to Hear Lawsuit Challenging Medicare Drug Price Negotiation, The Hill (Sep. 25, 2025, 6:40 PM ET), https://thehill.com/policy/healthcare/5522448-astrazeneca-challenges-medicare-drug-prices/#:~:text=The%20panel%20of%20judges%20soundly,patients%20and%20delay%20the%20inevitable.%E2%80%9D.
[18] See George Howard Jr. & Richard Paul, Employee Accommodation Requests for Religious Beliefs or Practices: The Supreme Court Rejects the De Minimis Undue Hardship Standard: A Substantial Cost to Employers?, Quarles (July 3, 2023), https://www.quarles.com/newsroom/publications/the-supreme-court-rejects-the-de-minimis-undue-burden-standard-a-substantial-cost-to-employers#:~:text=The%20high%20Court%20held%20an,practice%20only%20if%20it%20can.
[19] Final CY 2025 Part D Redesign Program Instructions Fact Sheet, supra note 5.
[20] Parts of Medicare, Social Security Admin., https://www.ssa.gov/medicare/plan/medicare-parts#:~:text=Private%20companies%20run%20Parts%20C,coverage%20types%20vary%20by%20provider (last visited Oct. 16, 2025).
[21] See Final CY 2025 Part D Redesign Program Instructions Fact Sheet, supra note 5 (showing that insurers typically pay 60% of the costs once enrollees enter the catastrophic phase).
[22] Nancy Ochieng, Juliette Cubanski, Tricia Neuman & Anthony Damico, Health Costs Consume a Large Portion of Income for Millions of People with Medicare, KAISER FAM. FOUND. (Aug. 21, 2025), https://www.kff.org/medicare/health-costs-consume-a-large-portion-of-income-for-millions-of-people-with-medicare/.