The year of 2022 has been a year for major legal rulings impacting various aspects of health care and pharmaceutical law. The following is a summary of the most significant of those decisions:
U.S. Supreme Court Overturns Roe v. Wade
The U.S. Supreme Court's highly controversial ruling in Dobbs v. Jackson Women's Health Organization on June 24, 2022, overturned nearly 50 years of the constitutional right to abortion established by the Court in Roe v. Wade. Within weeks, highly restrictive abortion laws went into effect in about a dozen states, with similar laws anticipated in a dozen more states in the upcoming weeks. Amidst legislation and court rulings, abortion accessibility in some states has been changing daily.
Legal changes are not the only developments affecting abortion access. Doctors and pharmacists have expressed concern about legal exposure in some states for engaging in procedures or prescribing pills that might be construed as facilitating unauthorized abortions. The Biden administration issued guidance in July 2022, claiming that the Emergency Medical Treatment and Labor Act required doctors to perform abortions in certain emergency circumstances, despite state laws. This guidance resulted in the Texas Attorney General filing a lawsuit three days later. It is unclear whether the Biden administration will fight back with formal rulemaking to support its informal guidance on the issue.
Three Court Rulings Have Multibillion Dollar Implications for Hospital Industry Income
First, in Becerra v. Empire Health Foundation, the U.S. Supreme Court sided with the U.S. Department of Health and Human Services (HHS) in its calculation of "disproportionate share hospital" payments for hospitals with large numbers of low-income patients. This ruling translates into less money for hospitals.
Next, the U.S. Supreme Court rejected a $1.6 billion annual cut to hospital reimbursement in the 340B program, which guarantees drug discounts to hospitals in lower-income areas. This discount program began in 2018 and distributed the savings throughout the hospital industry. Under the court's decision, hospitals will no longer enjoy these savings, and it is unclear how regulators will deal with discounts given in prior calendar years. The Supreme Court issued this ruling in American Hospital Association et al. v. Becerra et al.
Finally, in Texas Medical Association et al. v. United States Department of Health and Human Services et al., 2022 U.S. Dist. LEXIS 31807 (2022), the U.S. District Court for the Eastern District of Texas invalidated the arbitration system that is at the center of the No Surprises Act. This Act establishes procedures for resolving out-of-network reimbursement disputes between insurance companies and emergency medical care providers. The No Surprises Act intends to protect patients from unanticipated medical bills from medical care performed by out-of-network providers. The U.S. Department of Justice is developing a final rule to address the issues raised in the Texas court decision.
U.S. Supreme Court Weighs in on Opioid Cases Under CSA
In Ruan v. U.S., the U.S. Supreme Court changed the standard that the U.S. Department of Justice (DOJ) must meet to prosecute doctors under the Controlled Substances Act (CSA) for improperly prescribing opioids. The Court ruled that the DOJ must prove, beyond a reasonable doubt, that the doctors knew they were not legitimately practicing medicine. This newly heightened standard has cast doubt on pending CSA prosecutions across the country, and doctors already convicted under the CSA are starting to challenge their convictions in court.
Attorneys representing pharmacies and drug companies in civil opioid litigation also are attempting to use Ruan to support their defense in certain cases. For instance, attorneys for Walmart Inc. pharmacies that the DOJ has accused of exacerbating widespread opioid abuse, have stated that the DOJ should dismiss portions of its case due to the decision in Ruan. In response, the DOJ has sought to amend its complaint to add facts to demonstrate Walmart's liability.
In related news, drug distributors won a significant victory in a federal court in West Virginia, receiving a court decision that shielded them from liability for opioid abuse in Cabell County. Those cases were City of Huntington v. AmerisourceBergen Drug Corp. et al., case number 3:17-cv-01362, and Cabell County Commission v. AmerisourceBergen Drug Corp. et al., case number 3:17-cv-01665, both in the U.S. District Court for the Southern District of West Virginia.
U.S. Supreme Court Raises "Major Questions Doctrine" in Executive Branch Rulemaking
In West Virginia v. Environmental Protection Agency, the U.S. Supreme Court explicitly invoked the "major questions doctrine" in response to EPA rulemaking. While the decision has significant implications for the EPA and climate change, it could have even more severe repercussions for the U.S. Department of Health and Human Services (HHS). According to the EPA decision, regulations with vast economic and political significance can qualify as "major questions." Therefore, agencies issuing those regulations must identify "clear congressional authorization" for such regulations.
For HHS, this decision could be a substantial stumbling block. HHS oversees more than $1.5 trillion in annual spending and publishes thousands of pages of regulations each year. As a result, litigation is likely to arise in response to disfavored regulations arguing that they pose "major questions" and exceed congressional authorization.
The EPA decision also illustrates a growing trend in which the justices interpret a federal statute without using the Chevron deference standard; the high Court decided two other HHS cases this year in which they also avoided the Chevron framework altogether. Chevron deference is a long-standing standard that federal courts have used to defer to reasonable agency interpretations of ambiguous statutes. In the absence of Chevron, courts may strike down regulations more frequently.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.