An appeals court has reinstated a lawsuit against President Biden's Medicare program to lower drug prices

NEW ORLEANS — A federal appeals court in New Orleans on Friday revived a constitutional challenge to the Biden administration's program to allow Medicare to negotiate lower prices for widely used prescription drugs, ruling 2-1.

Congress created the program as part of the Inflation Reduction Act of 2022. The first 10 drugs to be negotiated were announced last year, and the new prices agreed to last month are scheduled to take effect in 2026.

Friday's ruling, issued by the 5th U.S. Circuit Court of Appeals, does not kill the program but sends the case back to the federal district court in Texas, which dismissed it in February, for further review. And it means the case will likely end up back in the conservative-dominated appeals court, where opponents of President Joe Biden's initiatives often file lawsuits on issues such as abortion access, immigration or gun rights.

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

Among their arguments is that Congress does not have the constitutional authority to delegate Medicare pricing decision-making authority to an executive branch department.

The district court said federal Medicare law requires that such claims be made first through the Department of Health and Human Services. But 5th Circuit Judge Jennifer Walker Elrod wrote that the claim was made under the IRA, not the Medicare law. Elrod, who was nominated to the 5th Circuit by former President George W. Bush, wrote on her own behalf and on behalf of Judge Kyle Duncan, who was 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 basis and substantive basis” of the National Infusion Center Association’s claims.

The Department of Health and Human Services declined to comment.

PhRMA released a statement welcoming the ruling: “We are pleased that the Fifth Circuit has agreed that the merits of our lawsuit challenging the IRA's drug pricing provisions should be heard.”

The advocacy group AARP criticized the lawsuit. “Any attempt to stop the drug negotiation program will jeopardize the well-being of millions of older people across the country who have waited far too long to be able to afford medications,” the organization said in an emailed press release.