No Review Means No Review: Third Circuit Holds IRA § 1320f-7(2) Bars Challenges to CMS’s Product-Grouping and Other Steps in Drug Selection, and Upholds Guidance-Only Implementation Through 2028

Introduction

In Novo Nordisk Inc. v. Secretary U.S. Department of Health and Human Services (3d Cir. Oct. 6, 2025), the U.S. Court of Appeals for the Third Circuit (per Judge Hardiman) affirmed summary judgment for the government and upheld the Inflation Reduction Act’s (IRA) Drug Price Negotiation Program against a suite of statutory and constitutional challenges brought by Novo Nordisk. The case presents two especially significant rulings:

• The IRA’s jurisdiction-stripping clause in 42 U.S.C. § 1320f-7(2) bars judicial review not only of CMS’s ultimate determinations of qualifying single source drugs and negotiation-eligible drugs, but also of the internal processes leading to those determinations—including CMS’s decision to group multiple related insulin products into a single “drug” for purposes of selection and pricing.
• For the initial years (2026–2028), Congress expressly authorized HHS/CMS to implement the Program via program instructions or other guidance, which the Third Circuit confirms is an exception to the APA and Medicare Act’s notice-and-comment requirements.

The panel also rejected nondelegation, due process, and First Amendment challenges, relying on its own recent precedents in AstraZeneca Pharms. LP v. Secretary HHS and Bristol Myers Squibb v. Secretary HHS. As a practical matter, the opinion cements the voluntariness framework of the Program, the breadth of the IRA’s judicial review bar, and the legitimacy of guidance-based implementation through 2028.

Background and Parties

The IRA’s Drug Price Negotiation Program requires CMS to negotiate “maximum fair prices” (MFPs) for selected high-expenditure drugs in Medicare Parts B and D, subject to statutory selection criteria and price ceilings keyed to market benchmarks and drug age. For the first pricing year (2026), CMS had to select ten drugs; the number scales up over time. Novo Nordisk, a manufacturer of insulin products, signed the CMS negotiation agreement and pricing addendum by the statutory deadlines, but then sued HHS/CMS challenging:

• CMS’s grouping of six insulin aspart products (Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, NovoLog PenFill) as a single “negotiation-eligible drug,”
• CMS’s use of binding “legislative” guidance without notice and comment, and
• Alleged constitutional defects under the nondelegation doctrine, the Fifth Amendment’s Due Process Clause, and the First Amendment.

The district court denied Novo Nordisk’s motion and granted the government’s, concluding in part that the IRA’s review bar deprived the court of jurisdiction over challenges to the selection and grouping determinations. Novo Nordisk appealed.

Summary of the Opinion

The Third Circuit affirmed, holding:

• Judicial review bar applies to CMS’s product grouping. Section 1320f-7(2) prohibits judicial review of the “determination of qualifying single source drugs” and “determination of negotiation-eligible drugs.” That prohibition extends to the “process by which” CMS reaches those determinations—including CMS’s grouping of related insulin aspart products as one drug.
• Ultra vires review is unavailable. Because Congress explicitly barred judicial review of these determinations, courts cannot invoke Leedom v. Kyne–style ultra vires review to reach the merits.
• Guidance-only implementation is expressly authorized through 2028. The IRA’s statutory note authorizes HHS to implement the Program for 2026–2028 “by program instruction or other forms of program guidance,” which qualifies as an express modification of usual rulemaking procedures under the APA and Medicare Act.
• Constitutional challenges fail. The Act provides an intelligible principle for nondelegation purposes; due process claims remain foreclosed by AstraZeneca; and the First Amendment compelled speech claim fails under Bristol Myers Squibb.

Detailed Analysis

1) Precedents and Statutes Driving the Decision

• Review bar and its scope
  • Bouarfa v. Mayorkas (U.S. 2024): Although agency action is presumptively reviewable, Congress can overcome the presumption via clear statement. The court found a clear statement here.
  • Wheaton Industries v. EPA (3d Cir. 1986) and American Clinical Laboratory Association v. Azar (D.C. Cir. 2019): Jurisdictional treatment of “no judicial review” clauses.
  • Bakran v. DHS (3d Cir. 2018): “Determination” encompasses the ultimate decision and the process used to reach it. The court analogized Bakran to hold that CMS’s product grouping is part of the unreviewable determination process.
• Ultra vires review foreclosed by explicit bar
  • Board of Governors v. MCorp Financial (U.S. 1991): Explicit bars on review preclude judicial intervention notwithstanding alleged ultra vires action.
  • Nuclear Regulatory Commission v. Texas (U.S. 2025): Ultra vires review applies “only when an agency has taken action entirely in excess of its delegated powers and contrary to a specific prohibition,” and does not override explicit review bars.
  • DCH Regional Medical Center v. Azar (D.C. Cir. 2019): Reinforces that courts must heed express statutory preclusions of review.
• Guidance-only implementation authority
  • IRA statutory notes to 42 U.S.C. §§ 1320f and 1320f-1 authorize HHS to implement the Program for 2026–2028 via program instructions or other guidance. Under 5 U.S.C. § 559 and 42 U.S.C. § 1395hh(b)(2)(A), Congress can expressly displace default APA/Medicare Act procedures. The Third Circuit, following its decision in Bristol Myers Squibb (3d Cir. Sept. 4, 2025), reaffirmed that this express authorization permits guidance to serve a legislative function in the first three years.
• Constitutional framework
  • Gundy v. United States (U.S. 2019): Nondelegation “intelligible principle” test governs; the court found it satisfied by the IRA’s detailed constraints on selection and pricing.
  • AstraZeneca Pharms. LP v. Secretary HHS (3d Cir. 2025): Rejected due process challenge; invoked again here.
  • Bristol Myers Squibb v. Secretary HHS (3d Cir. 2025): Rejected First Amendment compelled speech challenge; invoked again here.
  • Consumers’ Research v. FCC (5th Cir. 2024) (en banc), rev’d, 145 S. Ct. 2482 (2025): Cited for the Supreme Court’s admonition that multiple unsuccessful claims do not add up to a successful “combination” claim.

2) Legal Reasoning

The court’s reasoning unfolds in three principal steps.

1. Jurisdiction stripped by § 1320f-7(2), and “determinations” include the processes used to make them.

   Congress provided that “[t]here shall be no … judicial review of … the determination of negotiation-eligible drugs” and “the determination of qualifying single source drugs.” Novo Nordisk argued that it challenged a prior, separate decision—CMS’s grouping of six insulin aspart products as a single biological product, including across distinct BLAs—rather than the ultimate determination. The Third Circuit rejected that distinction, importing its Bakran definition of “determine” (“to fix conclusively or authoritatively” and “the act of coming to a decision”) to hold that the review bar covers both the end decision and the “process by which [the agency] reaches this decision.” That process expressly includes CMS’s groupings and definitional choices outlined in the 2023 Revised Guidance. Because the grouping produced the qualifying single source drug determination and the negotiation-eligible status, the challenge is jurisdictionally barred.

   The court also rejected two narrowing attempts:

   • Statutory exclusions only? Novo Nordisk contended the review bar was aimed only at specific exclusion determinations (e.g., small biotech and low-spend exceptions). The court emphasized the broader text barring review of the determinations themselves, not just exclusions.
   • Ultra vires exception? The court held that explicit review bars foreclose Leedom v. Kyne–style review, citing MCorp and the Supreme Court’s 2025 NRC v. Texas decision.
2. Guidance-only implementation is expressly authorized through 2028.

   A statutory note to the IRA provides that HHS “shall implement” the Program for 2026–2028 “by program instruction or other forms of program guidance.” The APA and the Medicare Act allow Congress to “expressly” authorize departures from notice-and-comment requirements (5 U.S.C. § 559; 42 U.S.C. § 1395hh(b)(2)(A)). Relying on Bristol Myers Squibb, the Third Circuit reaffirmed that Congress’s instruction here qualifies as just such an express authorization. Accordingly, CMS’s guidance—which operates with legislative effect in these years—is lawful despite the absence of notice-and-comment rulemaking.

3. Constitutional challenges fail under settled circuit precedent and the statute’s structure.
   • Nondelegation. The IRA tightly cabins CMS’s discretion: it prescribes which products can be selected (e.g., qualifying single source, years on market, absence of generic/biosimilar competition), caps permissible prices as percentages of market-based benchmarks tied to drug age (40–75%), and requires CMS to justify offers using specified statutory factors (e.g., R&D costs, federal funding, patent/exclusivity status, approvals, sales data, alternatives). The court held these constraints easily supply an intelligible principle.
   • Due process. Following AstraZeneca, the court held that the Program does not violate the Due Process Clause. The opinion also highlights the “escape hatch” making participation voluntary: manufacturers can avoid the excise tax by terminating related Medicare and Medicaid arrangements, and CMS has authority to authorize 30-day exits from relevant programs—points the court previously relied on in Bristol Myers Squibb to characterize participation as voluntary.
   • First Amendment. The compelled speech claim fails for the reasons given in Bristol Myers Squibb: the Program primarily regulates prices and associated conduct, and any compelled communications are incidental to that regulatory scheme.
   • “Holistic” theory rejected. Invoking the Supreme Court’s Consumers’ Research reversal, the court declined to aggregate separately unsuccessful nondelegation, due process, and review-bar arguments into a novel “combination” separation-of-powers claim.

3) Impact and Implications

This precedential opinion has immediate and far-reaching consequences for IRA litigation and implementation:

• Challenges to drug selection and product grouping are effectively foreclosed in the Third Circuit. By holding that § 1320f-7(2) blocks review of both the determinations and the processes that lead to them, the court insulates CMS’s grouping choices (for example, across different dosage forms, strengths, delivery devices, and even distinct BLAs held by the same entity) from judicial scrutiny. Manufacturers cannot repackage selection disputes as procedural or definitional challenges to evade the review bar.
• Procedural attacks on guidance for 2026–2028 have little traction. The express authorization to implement via guidance means APA and Medicare Act notice-and-comment arguments will fail for the first three pricing years. After 2028, however, ordinary rulemaking constraints presumably return unless Congress acts again, so process-based challenges may become salient for later phases.
• Constitutional litigation space is markedly narrowed. With AstraZeneca and Bristol Myers Squibb already rejecting due process and First Amendment theories, and this opinion rejecting a nondelegation attack, manufacturers face steep odds in constitutional challenges in the Third Circuit absent materially different facts or a change in higher court doctrine.
• Program voluntariness remains a cornerstone. The court’s reliance on the “escape hatch” and CMS’s 30-day exit option under existing statutory authority continues to undercut unconstitutional conditions and coercion narratives and reframes the excise tax as an avoidable consequence of a voluntary choice.
• Practical pricing and portfolio planning implications. Because CMS can group related products as a single biological “drug” for selection and MFP purposes, manufacturers should anticipate consolidated exposure where products share an active ingredient and BLA holder—even across separate BLAs. Corporate structuring or portfolio segmentation strategies designed to avoid selection are less likely to succeed, particularly for the initial program years.
• Litigation strategy recalibration. Post-Novo Nordisk, litigants will likely focus on:
  • Claims outside the scope of the review bar (e.g., constitutional challenges already largely foreclosed in this circuit),
  • Disputes arising after 2028 about whether CMS complied with any restored rulemaking requirements, and
  • As-applied issues not covered by the bar, recognizing it broadly covers selection, eligibility, and pricing determinations.

Complex Concepts Simplified

• Qualifying single source drug / negotiation-eligible drug. The IRA uses these terms to define which products can be selected for negotiation. “Qualifying single source” generally means a drug without marketed generic or biosimilar competition and with a specified time since approval (longer for biologics). “Negotiation-eligible” refers to those drugs, among the universe of qualifying drugs, that rank highest in Medicare spending and are not excluded by specific statutory exceptions.
• Maximum fair price (MFP). The negotiated price term CMS and the manufacturer agree to for a selected drug for a one-year pricing period. The statute caps the MFP at a percentage of a market-based benchmark and mandates justification based on listed factors; there is no statutory price floor.
• Judicial review bar. A statutory provision that expressly prohibits courts from reviewing specified agency decisions. Here, Congress barred review of CMS’s determinations of qualifying single source drugs, negotiation-eligible drugs, and related selection/pricing decisions.
• “Determination” includes process. As used in statutes, “determine” covers both the final decision and the process by which the agency reaches it. Thus, internal guidance, grouping choices, and methodologies that lead to the final determination are swept into the review bar.
• Ultra vires review (Leedom v. Kyne). A narrow doctrine permitting courts to intervene when an agency acts entirely beyond its statutory authority and contrary to a clear prohibition. It cannot overcome an explicit statutory bar on judicial review.
• Nondelegation and “intelligible principle.” The constitutional rule that Congress must provide guiding standards when delegating authority to the Executive. An “intelligible principle” exists when the statute meaningfully channels the agency’s discretion. The IRA’s selection rules, price ceilings, and mandated justification factors provide those standards.
• Guidance-only implementation through 2028. Congress expressly allowed HHS to implement the Program for the first three pricing years via program instructions or other guidance, which for that period functions with legislative effect notwithstanding normal notice-and-comment requirements.
• Program voluntariness and the excise tax. A manufacturer that declines to sign an IRA negotiation agreement can avoid the excise tax by exiting specified Medicare/Medicaid programs under existing statutory termination provisions. The Third Circuit has deemed this an “escape hatch,” making participation voluntary.

Conclusion

Novo Nordisk confirms two pivotal legal propositions for the IRA’s Drug Price Negotiation Program in the Third Circuit. First, the statute’s judicial review bar means what it says: courts cannot review CMS’s determinations of qualifying single source or negotiation-eligible drugs or the internal processes and groupings that lead to those determinations. Second, for 2026–2028, Congress expressly authorized HHS/CMS to implement the Program by guidance, dispensing with APA and Medicare Act notice-and-comment requirements during that period.

By reaffirming circuit precedent on nondelegation, due process, and the First Amendment, the opinion narrows the remaining litigation battlefield. It also delivers practical certainty to CMS and market participants, validating the agency’s product-grouping approach, securing guidance-based implementation through 2028, and underscoring manufacturers’ voluntary exit path. Looking ahead, process-focused challenges may reemerge for post-2028 rulemakings, but for now, the Third Circuit’s message is clear: within the ambit of § 1320f-7(2), “no review means no review.”