Regulatory Focus™ > News Articles > Healthcare Reform Case to go Before SCOTUS in Two Weeks

Healthcare Reform Case to go Before SCOTUS in Two Weeks

Posted 12 March 2012 | By

The Supreme Court of the United States (SCOTUS) will hear a series of challenges to the 2010 Patient Protection and Affordable Care Act (PPACA) of 2010 on 26-28 March, marking a historic challenge to a landmark piece of legislation with huge implications for the pharmaceutical, medical device and biotechnology industries.

SCOTUS' review of the law will start on 26 March with arguments on whether the Anti-injunction Act (AIA) applies to the review of the PPACA. The AIA states that any challenges to a law dealing with taxation must be made after the tax has been applied to a person. Because the PPACA's tax penalty provisions do not go into effect until 2015, this would push back the challenge to the law for several years. SCOTUS has set aside an hour and a half for arguments related to this issue.

On 27 March, SCOTUS will hear two hours of arguments on whether the Commerce Clause (Article 1) of the Constitution endows Congress with sufficient authority to mandate US citizens to purchase health insurance. This provision is more popularly known as the 'individual mandate.'

On 28 March, SCOTUS will hear two rounds of arguments relating to the individual mandate and Medicaid provisions within the law. An hour and a half will be spent deciding whether the individual mandate is 'severable' from the law if the individual mandate is found to be unconstitutional. If the mandate is found to be unconstitutional, but is not found to be severable from the law, the entire PPACA will likely be found unconstitutional as a result.

An additional hour on 28 March will be spent deciding whether Medicaid provisions in the law are sufficiently onerous as to make the program-currently technically voluntary, though no states have opted out-mandatory for states, and therefore an unconstitutional violation of states' rights.

Declaring any-or all-part of the PPACA unconstitutional will certainly have huge ramifications for the biopharmaceutical and medical device industries.

Among the many considerations:

The Biosimilars Price Competition and Innovation Act (BPCI)-Section XII of the PPACA-establishes a regulatory pathway for biosimilar products along with patent protections for biologic products.

The medical device industry is scheduled to be subject to a 2.3% excise tax at the end of this year.

The pharmaceutical industry agreed to give up $80 billion in profits over the next decade in return for the increased market access afforded by universal coverage. The industry already paid $2.5 billion in 2011, and is scheduled to pay another $2.8 billion in 2012.

Read more:

CNN - Dates set for Supreme Court health care reform arguments

Regulatory Focus newsletters

All the biggest regulatory news and happenings.