Will the BPCIA go down with Health Care Reform?

by Dechert LLP

As the Supreme Court’s week of arguments on the constitutionality of the individual mandate provisions of the 2010 health care reform act progressed, the pundits have seemed more and more certain that the Court will find these provisions unconstitutional.  But what does that mean for the rest of the Act, and from our perspective, does that mean anything for biosimilars?

The Biologics Price Competition Act (BPCIA) was enacted as part of the Patient Protection and Affordable Care Act, currently under the Supreme Court’s scrutiny.  Theoretically, if the Supreme Court holds any aspect of the Act unconstitutional, it can strike it from the books in its entirety.  Alternatively, the Court can sever the suspect provisions, and leave the rest of the Act intact.  The Court devoted its session on Wednesday to this issue of severability.

The plaintiffs (>20 States and some individuals) argued that the entire Act should be struck down:  “If the individual mandate is unconstitutional, then the rest of the Act cannot stand.”  Paul Clement, 3/28/12 Transcript at 4.  From their questions to counsel, it seems that most of the Justices believe the Court has the power to sever provisions of the Act.  The debate was should they sever, and if so, how?  As shown in the quotes below, at least a couple Justices seem to think it’s unwise or infeasible for the Court to pick and choose provisions of the Act to preserve.

Several of the Justices explicitly called out the biosimilar provisions as unrelated to the constitutionally suspect mandates for individuals to purchase health insurance.  For example, J. Breyer identified the BPCIA, as well as some other provisions as being able to stand on their own:

I would say the Breast Feeding Act, the getting doctors to serve underserved areas, the biosimilar thing and drug regulation, the CLASS Act, those have nothing to do with the stuff that we’ve been talking about yesterday and the day before, okay? So if you ask me at that level, I would say, sure, they have nothing to do with it, they could stand on their own. The Indian thing about helping the underserved Native Americans, all that stuff has nothing to do. Black lung disease, nothing to do with it, okay? So that’s – do you know what you have there? A total off-the-cuff impression. So that’s why I am asking you, what should I do?  Tr. at 23.  See also Tr. at 14 (Ginsberg).

Nonetheless, two influential Justices, Scalia and Kennedy, at least seemed to be leaning against severing and preserving any provisions, which would lead to the demise of the BPCIA:

J. Scalia:
“My approach would say if you take the heart out of the statute, the statute’s gone. That enables Congress to – to do what it wants in – in the usual fashion. And it doesn’t inject us into the process of saying: This is good, this is bad, this is good, this is bad. It seems to me it reduces our options the most and increases Congress’s the most.”  Tr. at 73.  See also Tr. at 10, 35, 38.

J. Kennedy:
When you say judicial restraint, you are echoing the earlier premise that it increases the judicial power if the judiciary strikes down other provisions of the Act. I suggest to you it might be quite the opposite. We would be exercising the judicial power if one Act was – one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended. By reason of this Court, we would have a new regime that Congress did not provide for, did not consider. That, it seems to me, can be argued at least to be a more extreme exercise of judicial power than to strike – than striking the whole. …  I just don’t accept the premise.  Tr. at 36.

Of course, two Justices do not make a majority, and it’s possible that even these Justices, particularly J. Kennedy, were focused on other provisions that directly relate to health care funding.  And, severability only becomes an issue if the Court rules that the mandate provisions are unconstitutional.  On the other hand, several other Justices, although apparently certain that the “peripheral” provisions should be severed, expressed concerns over the practicality of the Supreme Court pouring over the 2700-page Act to identify what’s appropriate to preserve.  So, in a nutshell, there seems like there’s a small, but real chance that the entire act, including the BPCIA, will be struck down.  That possibility would leave the stakeholders in the biosimilars space with either the exciting opportunity or the terrifying risk of Congress redesigning the BPCIA from the ground up.  One thing is for sure — if the BPCIA is struck down, the long path to the first approval of a biosimilar will get much, much longer.




DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dechert LLP | Attorney Advertising

Written by:

Dechert LLP

Dechert LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.