The recent Supreme Court decision striking down its 1984 ruling in Chevron v. Natural Resources Defense Council, has created a sizzling discussion on social media and news outlets. It has sent the healthcare sector reeling with potential implications.
The summary issue in the Loper Bright Enterprises vs. Raimondo ruling, which struck down the so-called Chevron deference precedent, is whether the courts or the administrative agency is best positioned to make decisions involving the agency’s sphere of influence. In its opinion, the court’s majority claims that Congress did not explicitly give an agency (e.g., the FDA or the Centers for Medicare & Medicaid Services [CMS], the Environmental Protection Agency, Internal Revenue Service, Federal Trade Commission, and many others) the regulatory power to take some regulatory actions by setting rules. Typically, Congress specifies the basic regulatory powers of an agency, like the FDA’s mandate to approve or reject new pharmaceutical products for marketing and distribution in the US. However, the general assumption (by Congress and others) has been that these agencies would make new rules or assume other powers based on the necessity to address evolving issues or new situations.
Justice John Roberts’ majority opinion tried to stake a line in the sand, saying that past legal proceedings that relied on the Chevron deference would not be affected by the new decision to reverse it. It will be interesting to see how plaintiffs, defendants, and the lower courts view and use this statement.
After the Supreme Court’s verdict, everyone is expressing confusion about which powers are actually held by administrative agencies today. There is only one thing I am sure of in this environment: Large-scale confusion will breed voluminous lawsuits and legal challenges.
The administrative agencies make this country tick, providing the expertise needed (through long-time or career personnel, including scientists like Drs. Anthony Fauci or Robert Califf) to best maintain the guardrails that allow the country’s economic, healthcare, and agricultural, and environmental interests to advance in the face of new challenges.
In terms of biosimilar approval and regulation, the FDA has made several decisions (regarding aspects of nomenclature, interchangeability, skinny labels, among others) that were not expressly stated as part of the enabling BPCIA legislation. These all could be questioned by the Supreme Court’s overturning of precedent.
Consider this potential scenario: a future lawsuit against the FDA for not approving a pharmaceutical manufacturer’s product to be made available over the counter. Sound familiar? It should. We’ve been through this already on the birth control front. Is a district court judge qualified to evaluate and overrule an FDA decision, based on science and public health considerations? And how long before this case makes its way to the Supreme Court, whose docket has been clogged with similar litigation? Apparently, this Court was unable to consider or grasp the pragmatic implications of its Loper decision.
This all but guarantees that agencies like the FDA and CMS will have to spend significant time reviewing the potential for their individual decisions to be questioned, litigated, etc. To some extent, it may have a paralyzing effect on certain new actions, while growing the number of lawsuits on past ones.
Consider the following potential resolutions:
(1) Another case comes along that allows the Court to revisit and modify its Loper ruling. That would imply new Supreme Court justices are reviewing the case years down the road.
(2) A heavily divided Congress begins the arduous task of specifically empowering the agencies to administrate their sectors as intended. I wouldn’t bet on that one.
If I were working at the agency affected, I’d continue to make the decisions as they see fit, and assume that any lawsuit filed would take 8-10 years to arrive at the overburdened Supreme Court, by which time a new majority is in place (or I may have moved on). I’m sorry, it’s the cynical, pragmatist in me.
