On behalf of the Pacific Research Institute, ABKF filed an amicus brief urging the Supreme Court to grant certiorari in two cases challenging an unconstitutional drug-pricing program created by the Inflation Reduction Act. The program requires drug companies to sell specific drugs to the government at below-market value. These companies have a nominal option to refuse.  But in truth, these companies have no option at all. Because if they refuse, they must either pay a confiscatory excise tax or withdraw all of their products from Medicare and Medicaid. Neither option is economically tolerable, leaving the companies with no choice but to accept the government’s terms.

In its amicus brief, the Pacific Research Institute argues (among other things) that the program violates the Takings Clause of the Fifth Amendment, which prohibits the government from taking private property unless it provides just compensation equal to the property’s fair market value. Lower courts dismissed this argument, reasoning that the government does not take the company’s drugs through the program, but rather acquires them in voluntary transactions. As the amicus brief explains, this reasoning loses sight of the way in which monopoly power like that which the government wields over Medicaid and Medicare can vitiate the relevance of consent. Here, the government uses its power to compel consent. Forced consent is not voluntary for constitutional purposes.

Ben Flowers served as counsel of record. With him on the brief are Joseph Ashbrook of ABKF and Professor Richard A. Epstein.

The brief is publicly accessible at this link.

Pacific Research Institute’s press release regarding the brief is available at this link.