More Uncertainty After DOJ Signals Approval of ACA Reversal

Will the Trump administration’s decision to say it would approve a possible federal appeals court ruling to completely overturn the Affordable Care Act (ACA) and its hundreds of provisions for healthcare and pharmaceuticals—including the creation of a biosimilars market in the United States—really come to pass?

Last December, US District Judge Reed O’Connor ruled that the ACA is unconstitutional because the president signed a tax plan removing the penalty for not having insurance. Under previous Attorney General Jeff Sessions, the Department of Justice (DOJ) said that while the law’s protections for people with pre-existing conditions should be struck down, the rest of the law, including the expansion of Medicaid, should survive.

Three DOJ attorneys, who now work under William Barr, sent a 2-sentence letter late Monday saying that the administration believes O’Connor’s ruling should be affirmed and that they will be filing a brief on the issue.

The ACA, when it was signed into law 9 years ago this past Saturday, created a biosimilars market in the United States through the Biologics Price Competition and Innovation Act (BPCIA), which provides the basis for the biosimilar regulatory pathway.

The BPCIA provides the framework under which biosimilars and interchangeable biologics can be approved by the FDA.

A coalition of Democratic-led states, led by California, is appealing O’Connor’s decision to the Fifth Circuit Court of Appeals. The decision in the case, Texas v Azar, was made in favor of the 20 Republican-led states that sued the federal government over the constitutionality of the ACA.

For now, the administration is not saying what it would try to implement in the ACA’s place. That omission could come into play in future court rulings, said Ha Kung Wong, JD, a partner at Venble LLP, in an email to The Center for Biosimilars^®.

“I think that not having a transition plan or alternative in place for healthcare would make a decision by the Fifth Circuit to affirm the District Court unlikely, at least from a practical impact position, particularly since the legal position supporting complete invalidation of the ACA is debatable,” Wong wrote. “If the Fifth Circuit does affirm the District Court though, I’d expect the Supreme Court to pick up the appeal since they’ve previously upheld the ACA, and they’d want to consider the legal issue more carefully before allowing for the inevitable practical impact on available healthcare.”

But, he said, if the lower court’s decision is reversed, he would expect the Supreme Court to stay out of the matter for now and let it continue to play out in the lower court.

Regarding the specific impact on the BPCIA and biosimilars litigation if the ACA is repealed, Wong said, “I think the BPCIA will be subject of significant debate as it looks to be re-passed in Congress, particularly in light of how its applicability has been interpreted by the courts. Though since the [information exchange] process is still considered optional by the courts, [the ruling] might not have an immediate impact on biosimilars litigation."

Wong said last year that most parties, generally speaking, were still deciding whether to engage in the patent dance in light of the ruling in Sandoz v Amgen.