Sixth Circuit Rejects Associational Standing in Medicare Drug Pricing Challenge
The Inflation Reduction Act (IRA) authorized the federal government to force prescription drug manufacturers to “negotiate” drug prices for Medicaid. In a large number of lawsuits, drug makers allege the negotiations are coercive and potentially unconstitutional. Among the claims made in the various suits are that the IRA’s rules violate due process, impose unconstitutional conditions, result in regulatory takings or excessive fines, and compel speech, among other things. Most of the cases are in district courts or focusing on preliminary matters, though the U.S. Court of Appeals for the Third Circuit rejected one suit on the merits.
This past week a panel of the U.S. Court of Appeals for the Sixth Circuit affirmed the dismissal of one of these cases on standing grounds in Dayton Area Chamber of Commerce v. Kennedy. Specifically, the Court concluded that because the lawsuit was not “germane to the Dayton Chamber’s purposes,” venue in the Southern District Court of Ohio was improper. Basically, the Court concluded that prescription drug makers, located elsewhere, could not use the Dayton Chamber to file suit in the Southern District of Ohio.
From the opinion:
An association may sue on behalf of its members if “(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333, 343 (1977). “[T]he doctrine of associational standing recognizes that the primary reason people join an organization
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