Today’s Supreme Court Decision Saves the US Biosimilar Regulatory Framework

On June 17, 2021, the US Supreme Court announced its long-awaited decision on the severability of the Affordable Care Act (ACA) from the individual mandate. The Supreme Court sidestepped the basic question, instead ruling 7-2 that the plaintiffs did not have any standing to sue.

If the Supreme Court ruling had struck down the ACA, it could have also struck down the underpinnings of the US biosimilar approval process. The Biologics Price Competition and Innovation Act (BPCIA) was promulgated as part of the ACA.

For the last three years, the case California v. Texas (previously Texas v. USA) had pinballed between lower courts and the appellate system. The gist of the case, brought by Republicans set on repealing the ACA, was that the individual mandate, which Congress elected not to enforce in 2017, was a central underpinning of the legislation. Without the individual mandate, they argued, the entire ACA was invalid. The initial district court ruling agreed with the plaintiffs, claiming that the individual mandate was not severable from the ACA overall, and the appeals court agreed that the individual mandate was not constitutional, but did not address the severability question.

The majority ruled that the petitioners did not have standing, because they failed to prove that they suffered or would suffer any sort of direct injury from the ACA remaining in force. The Supreme Court decision, written by Justice Stephen Breyer, did not address severability at all. A dissent written by Justice Samuel Alito with concurrence by Justice Neil Gorsuch, focused on whether the plaintiffs had standing. Justice Breyer’s dissent did argue for inseverability of any major portion of the ACA.

Had the dissenting opinion won the day, the burden may have fallen upon Congress to (1) reconstruct and (2) pass both the ACA and the BPCIA. There is little doubt, based on the widespread acknowledgement of the value of biosimilars, that the biosimilar pathway would be resurrected. Maybe not that quickly though—what types of amendments might have been attached to the legislation? Might there have been a second chance on tackling the ugly patent questions?

Thank goodness this did not send Congress back to the drawing board on either the ACA or the BPCIA. Based on the success of the ACA, I can’t help but wonder what the outcome would be today, with the political climate in Congress. It is a relief now that we’ll never know.  

This is an updated and corrected post. In the original, we had listed Justice Clarence Thomas as concurring on the dissenting opinion. This was in fact Justice Neil Gorsuch.