Author: Harrison Ferachi

On June 5, 1981, the Centers for Disease Control (CDC) announced the presence of a rare form of pneumonia in five previously healthy gay men in its Morbidity and Mortality Weekly Report — it wouldn’t be until 1986 that the Reagan administration mentioned “AIDS” in public. Around this time, about 16,500 people had perished from AIDS. With the brave advocacy of groups such as ACT UP and medical advances, the landscape of HIV/AIDS prevention and treatment has changed dramatically; available daily or long-term (injectable) treatments not only dramatically improve the quality of life for those with HIV but will even suppress the amount of virus to undetectable levels and thus become untransmittable.

In addition to innovative HIV treatment, we now have better tools for prevention. PrEP, or pre-exposure prophylaxis, is a medicine that dramatically reduces a person’s chances of HIV infection by about 99%. Through a daily antiviral tablet or quarterly injection, the medicine helps stop the virus from spreading throughout the body when taken correctly. While the use of PrEP has increased since its first approval, only an estimated 36% of those eligible for the prevention tool have received a prescription. Additionally, the equity in PrEP usage by race and ethnicity has decreased. In 2019, the Trump administration enacted the Ending the HIV Epidemic (EHE), a multi-pillar initiative to dramatically reduce new HIV diagnoses and improve the quality of care for those living with HIV. However, the impact of EHE and other initiatives is under threat by the evolving case of Braidwood Management Inc. v. Becerra.  

One of the critical features of the Affordable Care Act, Section 2713, mandated the complete coverage of preventative services graded “A” or “B’ by the U.S. Preventative Services Task Force in private employer health plans. In 2019, the USPSTF issued an “A” grade for PrEP (expanding it to injectable PrEP in 2023), meaning that private plans were now required to cover PrEP without cost-sharing. While litigation surrounding the contraceptive coverage requirements of the ACA is nothing new (see Burwell v. Hobby Lobby), Braidwood targets the preventative care provisions mentioned above.

The plaintiffs in Braidwood brought forth significant challenges to the ACA preventative care mandate: they claimed that, among other things, the mandate violated RFRA because it substantially burdened the religious exercise of plaintiffs who objected to supplying PrEP on religious grounds and that recommendations violated Article II’s Appointments Clause. The District Court held that the USPSTF members were not adequately appointed under the Appointments Clause and rejected Braidwood’s nondelegation arguments. Thus, this challenge preliminarily struck down the preventative services mandate. While the Fifth Circuit stayed the District Court’s decision in May 2023, appellate oral arguments continued on March 4, 2024.

If the Fifth Circuit upholds the District Court’s decisions, not only would private employer plans have the discretion to choose whether to cover preventative services, but it would erase the progress the nation has made in HIV prevention and treatment. One report estimates that if PrEP coverage amongst men who have sex with men decreases from 28% to 10%, it will result in 2,083 new HIV diagnoses within the next year. However, all may not be lost entirely if the Fifth Circuit doesn’t decide in favor of HHS: one proposition suggests transferring authority to recommend PrEP from the USPSTF to the CDC’s Advisory Committee on Immunization Practice (ACIP). Although only time will tell, the Fifth Circuit may uphold the District Court’s ruling and such threatens the progress we have made in HIV-treatment and prevention.

            It’s been more than a year since the passage of the Inflation Reduction Act (IRA), which made over $393 million in investments towards reinforcing existing energy infrastructure, furthering R&D on clean energy sources, and strengthening the Internal Revenue Service’s collections efficacy. One of the IRA’s blockbuster provisions has increasingly made waves in the news and courthouses nationwide: the Medicare Drug Price Negotiation Program. Before the IRA’s enactment, the Health and Human Services (HHS) Secretary was prohibited from involvement in negotiations between pharmacies, drug manufacturers, and prescription drug plan sponsors under the “noninterference” clause. The IRA inserted an exception to the clause that now mandates the Secretary to negotiate prices directly with manufacturers for a select number of expensive “single-source” branded drugs or biologics without generic or biosimilar counterparts.

In response to the Program, drug companies and trade groups have filed ten complaints across seven federal forums around the country (Astellas dropped their complaint as their drug did not appear on the first round of negotiations). The plaintiffs include Merck, U.S. Chamber of Commerce (through its Dayton chapter), BMS, PhRMA, Janssen, Boehringer, AstraZeneca, Novartis, and Novo Nordisk. Interestingly, the root of many of the plaintiffs’ novel constitutional claims are the consequences if any of the ten manufacturers choose not to participate in the Program.

All manufacturers of the first ten branded drugs up for negotiation were required to begin the negotiations by October 1, 2023. Any manufacturer that fails to negotiate with Centers for Medicare & Medicaid Services (CMS) will be required to either pay an excise tax amounting up to 95% of the medication’s sales or cease its participation altogether in Medicare and Medicaid. Since Medicare held a 30% share of U.S. retail prescription drug spending in 2017, nonparticipation or nonagreement to the negotiations would be a huge deal for several manufacturers.

While it is too early to tell whether the courts will validate some of the constitutional claims, we at least know that there is some skepticism regarding some of the plaintiffs’ due process arguments: such is so in the U.S. Chamber of Commerce complaint. In a disappointment to the Chamber and its members, Judge Michael J. Newman not only denied the Chamber’s motion for a preliminary injunction on the program but expressed disapproval of their due process claims, one of which is that the negotiated prices were confiscatory and thus violated the Fifth Amendment. Judge Newman stated that the negotiated prices were not confiscatory because participation in Medicare was voluntary for drug manufacturers, whether it was a wise business sense or not. Given that the order also cites plenty of Sixth Circuit precedent supporting the notion that participation in Medicare is voluntary, it will be interesting to see whether this impacts other constitutional arguments throughout the litigation’s lifecycle. This is especially so since the present Supreme Court is exceedingly suspicious of Fifth Amendment violation matters.

            The Chamber of Commerce suit is just the tip of the Medicare Negotiations Program litigation iceberg. There are also First, Fifth, and Eight Amendment concerns raised by many of the plaintiffs’ complaints (e.g. the 95% excise tax can be considered an “excessive fine” under Eighth Amendment). Some even expect the disagreement across the circuits to result in a fast track to the Supreme Court, which casts much uncertainty on the legal survival of a program that would yield $98.5 billion in savings for Medicare over ten years – only time will tell.