Spending Programs and the New Roberts Court
Nicole Huberfeld
The Supreme Court is poised to place new limits on Congress’s spending power at the urging of states vying for regulatory dominance, particularly in health care and public health. This Article highlights and catalogs the throughlines of argumentation, which sparked after states successfully challenged the ACA but have grown into opposing more than Medicaid’s cooperative federalism. Studying this pattern is imperative because many federal and state programs of significant import to health and social welfare rely on the federal spending power. This Article begins with a descriptive account of the conditional spending doctrine, contextualizing spending power challenges that are leveraging the Court’s revived federalism enforcement, willingness to revisit precedent, and heightened formalism in interpreting the Constitution and statutes. Part II incorporates three recent Supreme Court decisions into this landscape: Health and Hospital Corporation v. Talevski, Medina v. Planned Parenthood, and Moyle v. United States. Part III provides a roadmap that categorizes and analyzes patterns in litigation currently challenging spending programs. This reveals four theories advocates frequently invoke that would cabin the spending power: three testing its breadth and one that would limit private enforcement. At least two of these theories are likely to gain traction; indeed, Medina already showed some shifts in language, theory, and doctrine. Additionally, these theories cite federalism principles rooted in a dual-sovereignty governance paradigm. But conditional spending relies on cooperative federalism, which is characterized more by partnership and negotiation than bright lines in governance and policy responsibility. Accordingly, Part IV considers gaps in these efforts and the ramifications of new limits on the spending power, which could produce shifts in the scope, interpretation, and enforcement of longstanding social programs. Congress may not choose to work with states if the spending power becomes harder to exercise, either taking over or devolving social programs to states. However, states have long depended on federal funding for the fiscal stability balanced budgets require. Additionally, federal spending often has protected civil rights, so limits on spending programs may contribute to retrenchment.
Competitive Concerns from PBMs Selling Their Own Drugs
Michael A. Carrier & Rachel E. Sachs
In order to lower drug prices, policymakers and scholars have focused on ensuring regulatory approval and market entry of lower priced competitors to brand drugs. Few, however, have analyzed a subsequent stage of competition: being accessible to consumers. Just because a manufacturer is permitted to sell a competing product does not mean that it will actually be available to patients. In theory, pharmacy benefit managers (PBMs) play a role in enabling access to lower priced products by negotiating with pharmaceutical manufacturers and creating and maintaining formularies, lists of drugs covered by insurance plans. But today, it seems that PBMs are using formularies to increase their own financial rewards. In this Article, we examine a new development in PBMs’ conduct: the allowance of a limited amount of self-serving competition on formularies. The largest PBMs have recently entered the business of selling drugs in combination with drug manufacturers. These PBMs also have excluded from their formularies drugs competing with those in which the PBM has a financial interest, even if that would not be the most cost-effective option for patients. Although this self-serving competition could reduce prices in the short term, it threatens at least two downsides: (1) forestalling even greater price reductions and (2) harming long-term competition and innovation. This Article analyzes the competitive effects of this new behavior and analyzes potential antitrust claims including self-preferencing, exclusive dealing, collusion, and unfair competition.