As We've Long Said -- Both The Merck Strike Suit, And The PhRMA One Are... Poorly Reasoned. Now They Are Falling -- Out Of Bed.

An able USDC Judge in San Antonio, Texas has tossed the PhRMA strike suit against the federal agencies HHS and CMS, primarily. His name is Judge David Alan Ezra -- and his name will be familiar to regular readers (see my concluding footnote, below).

But tonight, we are seeing the first proof that these suits were a silly exercise. . . and in many ways, immaturely petulant -- as some of the titans in pharma stamped their feet, about having to play by the same free market rules the rest of us play by. Here's the 14 page opinion -- and the money bit of it. Um. . . told 'ya! [Of course, PhRMA may re-file outside of Texas, but it will face even more hostile review in its home jurisdiction -- of DC.] Here's the bit:

. . .The Supreme Court and the Fifth Circuit have held that federal question jurisdiction bars claims that “arise under” the Medicare Act, even when the claim is for reimbursement or is a constitutional challenge. Ill. Council, 529 U.S. at 13, Physician Hosps., 691 F.3d at 659. In Ill. Council, the Supreme Court determined that a constitutional challenge to Medicare regulations that affected future reimbursement still “arises under” the Medicare Act. 529 U.S. at 10–13 (finding that the jurisdictional bar applied when plaintiffs “needing advance knowledge for planning purposes, together bring a § 1331 action challenging such a rule or regulation on general legal grounds). Similarly, in Physician Hosps., a trade group and a hospital sought declaratory and injunctive relief on the basis that a provision of the Patient Protection and Affordable Care Act that limited Medicare reimbursements was unconstitutional. 691 F.3d at 659. There, the Fifth Circuit also found that the claims arose under the Medicare Act, even though the challenges were constitutional, because the Act still provided “both the standing and substantive basis for the presentation of the constitutional contentions. . . .”

“The term ‘arising under’ is broadly construed to encompass all claims for relief, regardless of whether the claimant seeks benefits, or declaratory or injunctive relief”. Ultimately, a claim arises under the Medicare Act if the Act provides the “standing and substantive basis for the presentation of the constitutional contentions.” Physician Hosps., 691 F.3d at 656 (quoting Salfi, 422 U.S. at 760–61). Here, just like the plaintiffs in Ill. Council and Physician Hosps., Plaintiffs ask the Court to hold that a law affecting future reimbursements is unconstitutional. These claims arise under the Medicare Act. . . .

Plaintiffs would not have standing or a substantive basis for a claim for reimbursement without the Medicare Act. Therefore, these claims arise under the Medicare Act and Section 405(h) channeling applies. . . .

These people did not exhaust their remedies in the administrative systems under federal law -- so they've been tossed out of court. [Obviously, this is a problem for Merck's claims as well.]

As a footnote, I personally deeply respect this jurist -- he's the same one in West Texas who's held that Abbott's floating barriers violate federal law, and he is proceeding to trial -- where Gov. Abbott will lose. Onward.

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