In coming weeks, the U.S. Supreme Court will decide whether two fishing companies must pay the costs of third-party observers to monitor a vessel’s compliance with regulations. On its face, the legal interpretation of a 1970s-era law seems completely unrelated to biotechnology and medicine in 2024. But the outcome of the cases could change how the FDA interacts with the industry it regulates.
The precedent is rooted in another case that also has nothing to do directly with the biopharma industry. Chevron U.S.A Inc. v. Natural Resources Defense Council centered on interpreting the federal Clean Air Act. The high court’s 1984 ruling in favor of the Environmental Protection Agency led to what’s called “Chevron deference,” a doctrine that holds when law is ambiguous or silent on a question, courts should defer to a regulatory agency’s interpretation of the statute.
Now the Supreme Court is asked to decide on what the National Marine Fisheries Service, a part of the Department of Commerce, may require of fishing vessels. The two cases – Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce – could set new precedent, one that narrows or even overturns Chevron deference, upending 40 years of regulatory practice.
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“One of the big benefits of Chevron deference is it allows scientific and technical expertise (from regulatory agencies),” said Zach Howe, assistant district attorney for the Southern District of California. “Getting rid of Chevron would force courts into the role of making those decisions.”
Howe spoke during a Supreme Court panel discussion Thursday during the annual BIO conference in San Diego. He was joined by Vanessa Burrows, partner at Simpson Thacher & Bartlett, and Judy Haron, assistant general counsel at PhRMA. The panel was moderated by Stacy Amin, former FDA chief counsel who now leads the FDA regulatory and compliance practice at Morrison Foerster.
Amin said when Congress leaves room in a statute for a federal agency to interpret the language, that leaves room to make policy choices. An FDA interpretation can result in a policy choice that reaches across the biopharma industry. By contrast, a court decision in one specific case may not have the same widespread effect.
The medication abortion drug mifepristone is at the heart of another case due for a Supreme Court decision in coming weeks, potentially shaking up the regulatory framework for medicines. The Alliance for Hippocratic Medicine initially challenged the drug’s approval in 2000. The alliance has since shifted its focus to subsequent FDA actions that made the drug easier to access, permitting non-physicians (such as nurse practitioners) to prescribe the drug and the decision during the Covid-19 pandemic that allowed mifepristone prescriptions without an initial in-person visit. The implications go beyond this drug. If a court can take away FDA approval of mifepristone, the same could happen to other drugs, doing away with years of a company’s scientific research and financial investment in a product, Burrows said.
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The mifepristone case, FDA v. Alliance for Hippocratic Medicine, was argued before the high court in March. The main part of the oral argument did not focus on issues of scientific or technical expertise, but rather on the issue of whether the Alliance for Hippocratic Medicine had standing in the case, Burrows said. Arguing on behalf of the FDA, the Department of Justice said the court should defer to the FDA’s scientific expertise. The alliance’s arguments include questions about whether the FDA’s actions were arbitrary or capricious — essentially whether the FDA should have done more scientific research. A Supreme Court decision that puts a court’s judgement in place of the FDA’s would have implications for other drugs.
“Depending on the outcome of this case, if it’s not kicked out on standing, then other questions could come up on (drug) approvals,” Burrows said.
Haron prefaced her remarks by stating her comments are her views, not PhRMA’s. She added that her expertise is in matters relating to the Centers for Medicare and Medicaid Services, not the FDA. A change in Chevron deference could affect CMS, she said. Overturning the precedent portends litigation over matters such as section 1862 of the Social Security Act, which states that the agency may not pay for any services that are not “reasonable and necessary.” What’s reasonable and necessary is decided by CMS all the time. Haron said that practice could remain in place even if Chevron is overturned.
Turning to drugs, Haron pointed to the Inflation Reduction Act’s first 10 drugs selected for Medicare negotiation. The Novo Nordisk insulins Fiasp and NovoLog are listed as one product because they’re both forms of insulin that each have the same active pharmaceutical ingredient. Haron noted they’re different products approved at different times, yet CMS considers them one drug. An overturning of Chevron could lead to litigation on such matters. Haron said Congress does not address everything when it makes laws, and sometimes lawmakers get things a little bit wrong. The ability to go to an agency and ask it to fix something is a powerful tool. That’s what’s at stake.
While Chevron deference has been cited thousands of times, Howe pointed to law review articles studying U.S. Supreme Court and circuit court use of the doctrine. One study found that in a little over 1,000 opinions, the doctrine was applied in only 84 opinions. However studies in lower courts show much greater application of Chevron deference.
“It’s still alive and well in lower courts, which suggests that if it went away it would have a big impact on the way cases are decided,” Howe said.
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