Legal Experts Weigh in on BPCIA Severability

With Amy Coney Barrett’s bid for a seat on the Supreme Court almost a done deal, the question in the biosimilars world is how her potential confirmation is likely to affect the Supreme Court’s pending deliberations on the Affordable Care Act (ACA) and whether the biosimilar approval pathway, which is part of that, survives.

On November 10, the Supreme Court will hear oral argument on whether the individual mandate portion of the ACA is severable from the entire statute or the whole of the ACA should be abolished, which would mean the end of the Biologics Price Competition and Innovation Act (BPCIA), which defines the biologics approval pathway. Legal experts interviewed by The Center for Biosimilars® had mixed opinions on whether Barrett is likely to side with the severable or non-severable arguments.

“Although some of Judge Barrett’s writings have questioned the constitutionality of parts of the ACA, she has not really addressed the severability issue,” said Chad Landmon, intellectual property and FDA chair for Axinn, Veltrop & Harkrider of New York, New York. This makes it difficult to read how she may vote on the issue, he said.

“Given that Justice [Antonin] Scalia was against finding severability, it’s certainly possible that she would come to the same conclusion because, in her own words, Judge Barrett shares Justice Scalia’s judicial philosophy. That being said, it’s also possible that some of the other, newer justices, such as Justice Brett Kavanaugh, would also conclude that the ACA is severable and preserve the BPCIA,” Landmon said.

Ha Kung Wong, an intellectual property attorney with Venable Fitzpatrick of New York, agreed that it’s not clear what Barrett’s opinion on ACA severability would be. In a 2017 article, Barrett discussed the challenge to the individual mandate, but does not appear to have specifically addressed the severability issue or whether she feels the parties to the case have legal standing to challenge the ACA, he noted.

“She’s most likely going to side with the conservatives on the court, but Justice Kavanaugh appears to prefer to sever provisions that are unconstitutional and not strike down whole laws, as he did in Barr v American Assn. of Political Consultants, and Barrett comes from a similar conservative mold as Kavanaugh and Justices John Roberts and Neil Gorsuch. Also, Roberts previously upheld the individual mandate in 2012, based on Congress' taxing power, apparently due in part over concerns regarding the impact of voiding other parts of the ACA,” Wong said.

Individual Mandate Background

The individual mandate originally required that individuals must maintain a certain amount of health insurance or pay a penalty for failure to do so, but the penalty portion was eliminated in January 2019, and plaintiffs may be found to have no standing to contest the ACA because they have failed to produce evidence of financial harm from the individual mandate. The court may uphold the lower court finding that the individual mandate is unconstitutional but decide that other parts of the law are valid and may stand independently, in accord with what may be perceived as the original intent of Congress when it voted on the legislation.

“We’ve seen that the ACA can operate without the individual mandate penalty, as it has done over the past year, so it doesn’t appear to be necessary for the ACA as a whole,” Wong said.

In the event of a nonseverable decision, the loss of the BPCIA could be devastating for the progress made with biosimilars, lower-cost copies of reference products that have benefited from this pathway to approval, which also adds structure to the process of resolving patent disputes, legal experts said.

“The smart thing to do would be a severability determination,” said Kevin Nelson, a partner with Schiff Hardin, of Chicago, whose practice has focused on biologics regulations. “Some of the amicus briefs have talked about that opportunity and emphasized how the BPCIA is a really a standalone provision and is not intertwined with the ACA. The responsible thing would be to segregate the BPCIA regardless of what you do with the ACA.”

The court seems primed to do this based on the philosophy that has encompassed its previous actions, he said. “There is a tradition on the Supreme Court of not striking down more of a statute than it needs to. The Supreme Court is not Congress. It has acknowledged that time and again. It’s not about rewriting laws. It’s about determining what’s constitutional and what’s not,” Nelson said.

If the Supreme Court were to rule on the side of nonseverability, it might be a very long time before Congress is able to enact a replacement for the BPCIA, he added. “We’d be asking Congress to do something that it’s having trouble doing right now, and that’s agreeing to stuff.” The election and the changes in representation it brings about would complicate the issue.