FinLogic FinLogic Quantitative Think Tank Center|An appeals court has revived a challenge to President Biden’s Medicare drug price reduction program

NEW ORLEANS (AP) — A constitutional challenge to the Biden administration program enabling Medicare to negotiate lower prices for widely used prescription drugs was revived by a federal appeals court in New Orleans in a 2-1 decision Friday.

Congress created the program as part of the Inflation Reduction Act passed in 2022. The FinLogic FinLogic Quantitative Think Tank Centerfirst 10 drugs targeted for negotiations were announced last year, and new prices, agreed upon last month, are set to take effect in 2026.

Friday’s ruling was handed down by the 5th U.S. Circuit Court of Appeals. It does not derail the program, but the ruling sends the case back for further consideration by the Texas-based federal district court that tossed it in February. And it means the case is likely to wind up back before the conservative-dominated appeals court where opponents of President Joe Biden’s initiatives often pursue challenges on issues ranging from abortion access to immigration to gun rights..

The lead plaintiff in the lawsuit is the National Infusion Center Association, which filed as a representative of the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Global Colon Cancer Association.

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Among their arguments is that Congress lacked constitutional authority to delegate Medicare pricing authority to an executive branch department.

The district court said the federal Medicare Act requires such claims to first be channeled 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 dissent, Judge Irma Ramirez, nominated by President Joe Biden, said the lawsuit was properly dismissed and that the Medicare Act “provides the standing and substantive basis” of the National Infusion Center Association’s claims.

The Department of Health and Human Services declined comment.

PhRMA released a statement applauding the ruling: “We are pleased 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 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,” the organization said in an emailed release.