Sixth Circuit swats lobbyists challenging Medicare price controls

CINCINNATI (CN) — Chambers of commerce are too far removed from the effects of drug pricing schemes implemented under the Inflation Reduction Act to pursue litigation under associational standing, a Sixth Circuit panel ruled Wednesday.

Although lower drug prices might affect their communities, the lack of a geographical connection between regional chambers like the Dayton, Ohio, Michigan and Ohio Chambers of Commerce and drug manufacturers included in the lawsuit dooms their legal challenge, according to the decision.

The appeals court upheld a ruling from U.S. District Judge Michael Newman, a Donald Trump appointee, who determined the interests of the chamber were not “germane” to those of the pharmaceutical companies, neither of which have any facilities in Ohio.

Newman dismissed claims brought by the U.S. Chamber of Commerce for the group’s failure to file suit in the appropriate venue.

Senior U.S. Circuit Judge Ronald Gilman, a Bill Clinton appointee, wrote the appeals court’s terse, 12-page opinion, and cited the Dayton Chamber’s failure to include a limiting principle for associational standing as the primary stumbling block.

“Without a limiting principle, a regional chamber of commerce could oppose any government regulation that impacts the national economy so long as a single member has individual standing to challenge the regulation.

“But existing law in fact provides the key limiting principle — i.e., that ’the interests it seeks to protect are germane to the organization’s purpose.’ The essential link is what is missing here. The subject matter of this litigation — the constitutionality of a federal program applicable only to pharmaceutical manufacturers — is simply not germane to the Dayton Chamber’s purpose of promoting regional business,” Gilman said.

The case was argued before the court in June, and the three-judge panel rejected the chambers’ claim a price-fixing scheme would harm their citizens.

“One could argue, in fact, that the overall standard of living in the Dayton area would actually improve with lower drug prices for its citizenry,” Gilman said. “And at best, any possible relation between Pharmacyclics’s and AbbVie’s interests in this lawsuit and the Dayton Chamber’s purposes exists only at a sky-high level of generality.”

He chided the pharmaceutical companies and characterized the lawsuit as a “stalking horse” designed to seek legal relief in a favorable venue, and quoted Newman’s previous opinion in refusing to adopt a “loose interpretation of the standing requirement for the purpose of forum shopping.”

Gilman did point out that regional chambers are not expressly precluded from litigating issues with a nationwide scope, and specifically mentioned that immigration laws could be challenged by local groups. He also emphasized the location of the pharmaceutical companies’ headquarters did not, in and of itself, require dismissal of the lawsuit.

“In sum, the fact that neither Pharmacyclics nor AbbVie has a headquarters or any facilities in the Dayton area is not fatal to associational standing, but that fact combined with the lack of any direct connection between the Dayton Chamber’s purposes and the issues at stake in this lawsuit is,” he concluded.

U.S. Circuit Judges Stephanie Dawkins Davis and Andre Mathis, both Joe Biden appointees, rounded out the panel and joined with Gilman’s disposition of the case.

Neither party immediately responded to requests for comment.

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