Biden drug price program/ Medicare pricing challenge/ federal appeals court/ Inflation Reduction Act/ pharmaceutical lawsuit/ Newslooks/ NEW ORLEANS/ J. Mansour/ Morning Edition/ A federal appeals court has revived a constitutional challenge to President Biden’s Medicare drug price reduction program. The challenge, brought by the National Infusion Center Association and pharmaceutical groups, questions the legality of Congress delegating Medicare pricing authority to the executive branch. The program, part of the Inflation Reduction Act, aims to lower drug prices for Medicare recipients starting in 2026.
Court Revives Challenge to Biden’s Medicare Drug Price Cuts Quick Looks:
- A federal appeals court has revived a challenge to Biden’s Medicare drug price negotiation program.
- The lawsuit, filed by pharmaceutical groups, claims Congress lacked the authority to delegate pricing control to the executive branch.
- The case now returns to a Texas district court for further review.
- The first 10 drugs with negotiated lower prices will see changes starting in 2026.
- AARP criticized the lawsuit, warning it risks the health of millions of older Americans.
Biden’s Medicare Drug Pricing Plan Faces Legal Challenge After Court Ruling
Deep Look:
A federal appeals court in New Orleans has revived a constitutional challenge to President Joe Biden’s Medicare drug price negotiation program, which is part of the broader Inflation Reduction Act (IRA) passed in 2022. The program allows Medicare to negotiate the prices of widely used prescription drugs, with new prices set to take effect in 2026. However, pharmaceutical groups and their allies have argued that Congress exceeded its constitutional authority in creating the program, reigniting a legal battle that could have far-reaching consequences for drug pricing reform.
Legal Challenge Moves Forward
The 5th U.S. Circuit Court of Appeals, in a 2-1 decision on Friday, ruled that the case brought by the National Infusion Center Association and pharmaceutical advocacy groups can move forward. The ruling returns the case to a Texas federal district court, which had previously dismissed it. This decision means the challenge will likely be heard again in the conservative-leaning 5th Circuit, a frequent venue for challenges to President Biden’s policies on various issues.
At the heart of the lawsuit is the argument that Congress lacked the authority to delegate Medicare pricing power to the Department of Health and Human Services (HHS). The plaintiffs, including PhRMA (Pharmaceutical Research and Manufacturers of America) and the Global Colon Cancer Association, claim the pricing decisions infringe upon the constitutional separation of powers.
Conflicting Opinions in the Court
Judge Jennifer Walker Elrod, writing for the majority, argued that the lawsuit was brought under the Inflation Reduction Act, not the Medicare Act, and therefore deserves to be heard in court. Elrod was joined by Judge Kyle Duncan in the decision. Both judges were appointed by Republican presidents—Elrod by George W. Bush and Duncan by Donald Trump.
In her dissent, Judge Irma Ramirez, a Biden appointee, disagreed, stating that the Medicare Act should be the legal framework for handling such claims. She argued that the district court was correct in dismissing the lawsuit, as the Medicare Act provides the legal standing for claims related to the program.
Implications for the Medicare Drug Price Program
While the appeals court ruling doesn’t immediately block the Medicare drug price reduction program, it opens the door for further legal challenges. The program was designed to help reduce costs for Medicare recipients by negotiating lower prices for high-use drugs. In August 2023, the first 10 drugs targeted for price reductions were announced, with changes slated to begin in 2026.
Proponents of the program, including advocacy groups like AARP, argue that it is a necessary step to make essential medications more affordable for older Americans. They believe that halting or delaying the program could harm millions of seniors who depend on Medicare for access to life-saving treatments. “Any efforts to stop the drug negotiation program in its tracks risks the wellbeing of millions of older adults in the country who have waited far too long to afford medicine,” AARP said in a statement.
Next Steps
With the case now heading back to the Texas district court for further review, the legal battle over Medicare drug pricing is far from over. The Biden administration and supporters of the program will need to defend its legality in court while pharmaceutical groups push to invalidate the changes.
PhRMA, in its statement, welcomed the appeals court’s decision, emphasizing that the merits of the lawsuit should be fully examined. “We are pleased the Fifth Circuit agreed that the merits of our lawsuit challenging the IRA’s drug pricing provisions should be heard,” the organization stated.
The case adds to a growing list of legal challenges targeting President Biden’s policy initiatives, many of which have been filed in conservative courts where plaintiffs often seek to curtail his administration’s authority.
