Ohio Health Lawyer & Attorney : Jayne Juvan : Benesch Friedlander Law Firm : Serving Columbus, Cleveland, Cincinnati, Toledo, Akron, Dayton, Parma, Youngstown, Canton, and Lorain OH

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Dr. Adam Fein from Drug Channels has recently reported that, on November 7, 2007, the National Association of Chain Drug Stores (“NACDS”) and the National Community Pharmacists Association (“NCPA”, and, collectively with NACDS, the “Plaintiffs”) sued to enjoin the United States Department of Health and Human Services (“HHS”), Michael O. Leavitt, Secretary of HHS (“Leavitt”) (in his official capacity only), the Centers for Medicare and Medicaid Services (“CMS”) and Kerry Weems, CMS Acting Administrator (“Weems”, and, collectively with HHS, CMS and Leavitt, the “Defendants”) (in his official capacity only) from enforcing the final rule issued July 17, 2007 that establishes a new methodology for calculating Medicaid reimbursement rates for prescription drugs (referred to by the Plaintiffs as the “AMP Rule”). For those interested in following the case, Dr. Fein's blog includes links to several of the important documents.

On the merits, the Complaint alleges that court should not only issue an injunction, but also declare that the AMP Rule is illegal because the

AMP Rule is contrary to the plain language of the Social Security Act, contrary to Congress’ clear intent when it enacted that statute, contrary to Defendants’ prior application of that statute, contrary to dozens of other federal and state statutes and regulations, contrary to long-standing industry practices, and contrary to common sense.

Though I’d certainly enjoy providing commentary concerning the merits of the case, given my representation of certain retail pharmacies, I must decline the opportunity at this time. Nevertheless, I thought insight concerning the D.C. Circuit's standard applicable to a request for a preliminary injunction might be helpful to those following the case.  

In his recent post, Dr. Fein references the preliminary injunction standard applied by the Second Circuit last December in RxUSA Wholesale v. DHHS. The case filed by the Plaintiffs is before the D.C. Circuit and the court could, at least theoretically, apply a standard that departs signficantly from that applied by the Second Circuit.  Thus, a review of D.C. Circuit case law is in order.

A review of D.C. Circuit case law has revealed that the standard applied by the D.C. Circuit is actually quite similar to that applied by the Second Circuit in RxUSA Wholesale. Echoing similar language used by the Second Circuit, the D.C. Circuit has indicated that the standard is quite high. In Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290 (D.C. Cir. 2006), the court noted a preliminary injunction is “an extraordinary remedy that should be granted only when the party seeking the relief, by a clear showing, carries the burden of persuasion.” Id. (quoting Cobell v. Norton, 391 F.3d 251, 258 (D.C. Cir. 2004). 

The D.C. Circuit considers the following factors:

1. a substantial likelihood of success on the merits,
2. that the movant would suffer irreparable injury if the injunction were not granted,
3. that an injunction would not substantially injury other interested parties, and
4. that the public interest would be furthered by the injunction.

If the showing on one factor is particularly strong but the case in support of the other factors is weak, the court may grant the injunction if irreparable harm is present. If the other three factors weigh in favor of granting the preliminary injunction but irreparable harm is absent, the requested injunction should be denied. Accordingly, the analysis focuses largely around the demonstration of irreparable harm.

The showing of irreparable harm requires that the movant demonstrate an injury that is not merely theoretical, but instead is both actual and great. As stated by the D.C. Circuit,

The key word in this consideration is irreparable. Mere injuries, however, substantial, in terms of money, time and energy necessarily expended in the absence of a stay are not enough. The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation, weighs heavily against a claim of irreparable harm. 

(emphasis added).

Thus, if, for example, damages are adequate to atone for the harm caused, the request for an injunction should be denied.

In the case at issue, the Plaintiffs have alleged that the balance weighs in favor of a grant of the injunction because:

a.  It is always in the public interest that agencies faithfully fulfill statutory mandates;

b.  Retail pharmacies, Medicaid patients and the general public will incur substantial, imminent and irreparable harm if the AMP Rule goes into effect and flawed AMP data are posted on a public website; and

c.  A delay for CMS to promulgate a final rule that conforms with the Social Security Act and Congressional intent will not harm the Defendants.

On this one, while I’d love to chime in, I’ll leave it to you to speculate about whether the Plaintiffs will experience the same success as did RxUSA Wholesale around this time last year.