Opinion ID: 204019
Heading Depth: 3
Heading Rank: 1

Heading: Congress's Careful Balancing of Policy Objectives

Text: First, AstraZeneca argues that invoking state consumer protection laws to find liability for not reflecting discounts and rebates in the reported AWPs undermines Congress's decision to use the published AWPs as the basis for reimbursement under Medicare Part B. Such a finding of liability would, says the appellant, impose through state law what Congress itself rejected, namely, a cost-based reimbursement system. This argument lacks merit for a number of reasons, not the least of which is the argument's reliance on the untenable interpretation of Congress's policy objectives discussed above. As we explained in the previous section, the legislative history and statutory context surrounding the Medicare program and the BBA does not support the assertion that Congress approved a reimbursement system by which pharmaceutical companies could be reimbursed at any rate they saw fit to have published as the AWP in industry publications, while simultaneously offering substantial discounts and rebates in the marketplace. On the contrary, throughout the time periods relevant to this appeal, Congress expressed its concern about Medicare overpayment when confronted with indications of such a practice, and it ordered studies of, and ultimately retreated from, the use of AWP as a reimbursement benchmark. A state consumer protection law that covers as severe a form of price manipulation as this cannot be said to be contrary to Congress's intent in establishing and administering the Medicare program. This is especially so given that, as explained below, Chapter 93A was relied upon to check only the most pronounced cases of AWP inflationspreads that exceeded 30%and therefore were not used to impose the cost-based reimbursement system that AstraZeneca decries. Moreover, it is telling that Congress did not go so far as to enact an express preemption provision at any time during the more than forty-year history of Medicare. See Wyeth, 129 S.Ct. at 1200 (If Congress thought state-law suits posed an obstacle to its objectives, it surely would have enacted an express pre-emption provision at some point during the [Food, Drug, and Cosmetic Act's] 70-year history.). On the contrary, there can be no question that Congress was aware of the existence of state law liability schemes so ubiquitous as common law fraud and consumer protection statutes. See Penn. Med. Soc'y v. Marconis, 942 F.2d 842, 850 (3d Cir.1991) ([W]hen Congress remains silent regarding the preemptive effect of its legislation on state laws it knows to be in existence at the time of such legislation's passing, Congress has failed to evince the requisite clear and manifest purpose to supersede those state laws. ( citing Cal. Fed. Sav. & Loan Assoc., 479 U.S. at 287-88)). In fact, far from demonstrating Congress's intent to preempt state law consumer protection statutes, the Medicare statute reserves a regulatory role to the states that arguably includes some of the compensation aspects of this appeal, and in any event demonstrates Congress's intent to minimize federal intrusion into the area of provider compensation. See 42 U.S.C. § 1395 (Nothing in this subchapter shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the... compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the administration or operation of any such institution, agency, or person.); see also Mass. Med. Soc'y, 815 F.2d at 791 (describing § 1395 as explicitly stating the ... intent to minimize federal intrusion into the related field of fee regulation of medical services for the elderly). If anything, we are inclined to conclude that the opposite proposition is true: that Congress relied on the existence of state consumer protection and fraud statutes to combat severely manipulative pricing schemes resulting in overpayments by Medicare and its beneficiaries. At the least, this conclusion is implied by the fact that, for all of the Medicare statute's anti-fraud provisions, and despite Congress's and HCFA's ongoing concern about the practice, the text of the Medicare statute does not provide an express remedy for practices like AWP inflation. It therefore appears that the state law cause of action at issue aids federal law rather than hinders it. But we need not go so far as to draw this conclusion; that Congress did not express or imply its intent to preempt state law is enough to defeat AstraZeneca's argument.