Nat’l Infusion Ctr. Ass’n et al. v. Becerra
Brief summary: The National Infusion Center Association (NICA), Global Colon Cancer Association (GCCA), and Pharmaceutical Research and Manufacturers of America (PhRMA), filed a lawsuit against the Department of Health and Human Services alleging that the “Drug Price Negotiation Program” is unconstitutional.
Background: In 2022, the United States Congress passed the Inflation Reduction Act of 2022 (IRA). The IRA has many provisions, several of which related to health care affordability, including affordability of prescription drugs. Under the IRA Congress delegated authority to HHS to negotiation with pharmaceutical companies for the cost of prescription drugs for the Medicare and Medicaid programs. HHS can execute this authority under the “Drug Price Negotiation Program”. If pharmaceutical companies do not participate in the Drug Price Negotiation Program they will be subject to an excise tax for non-participation.
Overview: On June 21, 2023, NICA, GCCA, and PhRMA filed a lawsuit in the U.S. District Court for the Western District of Texas against HHS, alleging that the Drug Price Negotiation Program is unconstitutional on several grounds.
First, the complaint alleges that Congress impermissibly delegated broad authority to HHS to set Medicare prices, encroaching upon both the separation-of-powers and nondelegation principles. The complaint argues that Congress failed to provide HHS with reasonable guidelines and constraints to implement the Drug Price Negotiation program, therefore, it must violate the non-delegation doctrine.
Second, the complaint alleges that the non-participation excise-tax within the Drug Price Negotiation Program violates the Eighth Amendment’s Excessive Fines Clause. The complaint argues that the excise-tax mandates participation in the Drug Price Negotiation Program, thereby removing the programs voluntariness.
Lastly, the complaint alleges that the Drug Price Negotiation Program violates the Fifth Amendment’s Due Process Clause by eliminating the opportunity for public comment and judicial review throughout the negotiation process. Ultimately, the complaint requests that the Court issue a permanent injunction against the Drug Price Negotiation Program. Read the complaint here.
Impact: If the IRA Drug Price Negotiation program is upheld and the Federal Government is permitted to negotiate drug prices with pharmaceutical companies, this could help lower the cost of prescription drugs for some consumers. However, this may also disincentive pharmaceutical companies from investing in the research and development of new drugs, if these companies are unable to recoup their costs once the drugs come to market.
If the entirety of the Drug Price Negotiation Program is struck down, Congress will have to reconsider how it can reduce the cost of prescription drugs for consumers.
Last Updated on July 3, 2023 by Aimed Alliance
