Pharma Industry Argues Unconstitutionality In Price-Settings

NICA, PhRMA, and GCCA lodged a complaint in the U.S. District Court for the Western District of Texas, asserting that the price setting provisions outlined in the Inflation Reduction Act infringe upon the Constitution. They argue that these provisions lack checks and balances, deny administrative and judicial review, and impose an excessive fine, all of which should render them unconstitutional.

NICA CEO Brian Nyquist stated that while they support lower costs for patients, infusion providers lack control over medication prices. He highlighted the potential negative consequences of the government’s price-setting provisions in the IRA, including reduced reimbursement below acquisition cost and decreased community-based infusion capacity. Nyquist mentioned an analysis projecting a significant drop in income for office-based infusion centers and emphasized the need for litigation to protect NICA members and preserve access to these centers.

GCCA Executive Director Andrew Spiegel expressed concern about the rising rate of colorectal cancer among Americans under 55. He emphasized the need for more effective treatments and criticized the price-setting provisions in the IRA for impeding progress and disregarding patient input. Spiegel stated that GCCA joined the lawsuit to advocate for better support and outcomes for colorectal cancer patients.

PhRMA President and CEO Stephen J. Ubl criticized the price-setting scheme in the Inflation Reduction Act, stating that it threatens research, and patients’ access to medicines, and violates the U.S. Constitution. He expressed hope that the court would recognize these concerns and declare the provisions unconstitutional.

The price-setting provisions outlined in the Inflation Reduction Act are subject to various constitutional violations, warranting a declaration of unconstitutionality. These violations are as follows:

• The price-setting provisions in the Inflation Reduction Act violate the separation of powers by granting excessive authority to HHS without proper constraints, in violation of constitutional nondelegation principles.
• The price-setting scheme denies manufacturers the right to provide input and seek review, infringing upon their Fifth Amendment due process rights. HHS’s proposed guidelines further undermine transparency in the process.
• The excise tax imposed by the Act as a means of enforcing compliance constitutes an excessive fine, violating the Eighth Amendment’s Excessive Fines Clause.

The complaint seeks relief in the form of declaring the price-setting scheme unconstitutional based on the violations of nondelegation and separation-of-powers principles. Additionally, it aims to declare the excise tax unconstitutional, citing its inconsistency with the Eighth Amendment. The complaint also requests the recognition of the violation of due process rights and the implementation of adequate procedural processes, including public notice, comment, and judicial review. Furthermore, it seeks to enjoin HHS from implementing the price-setting scheme without these safeguards and to prevent the government from enforcing the excise tax specified in the Act.