NEW ORLEANS (AP) — A federal appeals court in New Orleans on Friday ruled 2-1 that it revived a constitutional challenge to the Biden administration’s program that allows Medicare to negotiate lower prices for commonly used prescription drugs.
Congress created the program as part of the Inflation Reduction Act passed in 2022. The first 10 drugs under negotiation were announced last year, and the new prices, agreed to last month, are expected to take effect in 2026.
Friday’s ruling, issued by the 5th U.S. Court of Appeals, doesn’t derail the program, but it sends the case back for consideration by the federal district court in Texas, which dismissed it in February. And it means the case will likely end up back before the conservative appeals court, where opponents of President Joe Biden’s initiatives often file objections on issues ranging from abortion access to immigration to gun rights.
The lead plaintiff in the lawsuit is the National Infusion Center Association, acting on behalf of Pharmaceutical Research and Manufacturers of America (PhRMA) and the Global Colon Cancer Association.
One of their arguments is that Congress does not have the constitutional authority to delegate the power to set Medicare prices to an executive branch.
The district court said the federal Medicare Act requires such claims to first be routed through the Department of Health and Human Services. But 5th Circuit Judge Jennifer Walker Elrod wrote that the claim was brought under the IRA, not the Medicare Act. Elrod, who was nominated to the 5th Circuit by former President George W. Bush, wrote on behalf of herself and Judge Kyle Duncan, nominated by former President Donald Trump.
In a dissenting opinion, Judge Irma Ramirez, nominated by President Joe Biden, said the lawsuit was properly dismissed and that the Medicare Act provides “the legal standing and substantive basis” for the National Infusion Center Association’s claims.
The Ministry of Health and Welfare declined to comment.
PhRMA released a statement applauding the ruling: “We are pleased that the Fifth Circuit agreed that the merits of our lawsuit challenging the IRA’s drug pricing provisions should be heard.”
The advocacy group AARP was critical of the lawsuit. “Any attempt to end the drug negotiation program jeopardizes the well-being of millions of seniors across the country who have waited far too long to afford their medications,” the organization said in an emailed statement.
