Anti-Injunction Act “Regan” Exception Where a Refund Suit Is Economically Unrealistic; IRA Medicare Drug-Price Negotiation Survives Nondelegation and Due Process Challenges

1. Introduction

In Natl Infusion Center v. Kennedy, the Fifth Circuit addressed a facial constitutional challenge to the Inflation Reduction Act of 2022 (“IRA”) Medicare Drug Price Negotiation Program (“Program”). The plaintiffs—National Infusion Center Association (on behalf of providers), Global Colon Cancer Association (on behalf of patients), and Pharmaceutical Research and Manufacturers of America (on behalf of manufacturers)— sued the Secretary of HHS, HHS, the CMS Administrator, and CMS.

The core dispute was whether Congress, by directing HHS/CMS to “negotiate” a “maximum fair price” for selected drugs and attaching severe consequences to nonparticipation (including an excise tax under 26 U.S.C. § 5000D), violated (i) the nondelegation doctrine, (ii) the Eighth Amendment’s Excessive Fines Clause, and (iii) Fifth Amendment due process. The district court granted summary judgment to the Government; the Fifth Circuit affirmed, though it corrected the district court’s Anti-Injunction Act analysis and reached the Excessive Fines issue on the merits.

2. Summary of the Opinion

  • Nondelegation: The IRA supplies an “intelligible principle.” Its detailed definitions, eligibility rules, ceilings, procedures, and mandatory factors meaningfully constrain HHS. “Fair” plus enumerated factors supplies a functional floor; HHS cannot set a price at “zero” consistent with the statute.
  • Combination theory (nondelegation + reduced procedural/judicial constraints): Even assuming the court may consider the IRA’s bar on review and (temporary) guidance-based implementation, those features do not convert an otherwise permissible delegation into an unconstitutional one.
  • Standing (Excise tax claim): Plaintiffs had standing against HHS/CMS because relief could “potentially lessen” injury by disrupting required information-sharing needed to determine the tax.
  • Anti-Injunction Act: The excise tax is a “tax” for AIA purposes, but the South Carolina v. Regan exception applies because a refund suit is not a realistic alternative remedy given the tax’s potentially crushing accrual during litigation.
  • Excessive Fines (merits): The excise tax is not a “fine” because it lacks the requisite connection to criminal (or quasi-criminal) punishment; it is triggered by lawful choices about Medicare-reimbursed sales.
  • Due process: No protected property/liberty interests were shown. Manufacturers have no entitlement to sell to Medicare at preferred prices; patent rights do not include price rights; participation is voluntary. Providers lack an entitlement to preferred reimbursement levels beyond statutory rates. Patients have no due process right to continued access to all medicines through Medicare/Medicaid.

3. Analysis

3.1 Precedents Cited

A. Statutory interpretation and constitutional avoidance

  • Loper Bright Enters. v. Raimondo (603 U.S. 369 (2024)): The court invoked “best reading” textualism to interpret “sale” in § 5000D to mean Medicare-reimbursed sales, aligning the tax with the IRA’s Medicare-cost focus and reducing constitutional friction. This is notable as post-Loper Bright adjudication foregrounds independent judicial statutory interpretation rather than Chevron-style deference.
  • FCC v. Consumers' Rsch. (606 U.S. 656 (2025)) and United States v. Hansen (599 U.S. 762 (2023)): Used for the canon that statutes should be read to “seek harmony” with the Constitution when plausible, reinforcing the court’s narrowing constructions (both the excise-tax sales base and “good cause” termination mechanics).

B. Nondelegation framework

  • J.W. Hampton, Jr., & Co. v. United States (276 U.S. 394 (1928)): Central to rejecting the argument that “shall consider” factors are too weak; Hampton upheld a statute requiring the President to take factors “into consideration,” and the IRA’s “shall consider” is at least as constraining.
  • Touby v. United States (500 U.S. 160 (1991)), Gundy v. United States (588 U.S. 128 (2019)), and Whitman v. Am. Trucking Ass'ns (531 U.S. 457 (2001)): Reinforced the “not demanding” nature of the intelligible-principle test and the Court’s historical reluctance to second-guess Congress’s policy granularity.
  • Panama Refin. Co. v. Ryan (293 U.S. 388 (1935)) and A.L.A. Schechter Poultry Corp. v. United States (295 U.S. 495 (1935)): The opinion contrasted the IRA with the rare statutes struck down for effectively standardless delegations.
  • Yakus v. United States (321 U.S. 414 (1944)), Lichter v. United States (334 U.S. 742 (1948)), and National Broad. Co. v. United States (319 U.S. 190 (1943)): Served as comparators showing that terms like “fair and equitable,” “excessive profits,” and “public interest” have sufficed—supporting the conclusion that “maximum fair price” plus enumerated criteria is comfortably constitutional.
  • American Power & Light Co. v. SEC (329 U.S. 90 (1946)): Cited for the proposition that judicial review can be a safeguard, but the Fifth Circuit emphasized that the absence of review is not itself a recognized trigger for invalidating delegations.
  • Free Enter. Fund v. Pub. Co. Acct. Oversight Bd. (561 U.S. 477 (2010)) and FCC v. Consumers' Rsch. (606 U.S. 656 (2025)): Used to evaluate the plaintiffs’ “combination theory.” The court distinguished the “single-axis compounding” in Free Enterprise Fund from the plaintiffs’ attempt to aggregate multiple IRA features into a nondelegation violation.

C. Administrative process arguments

  • Minnesota State Bd. for Cmty. Colls. v. Knight (465 U.S. 271 (1984)): The Constitution does not require notice-and-comment participation as a matter of due process in broad policymaking.
  • Vermont Yankee Nuclear Power Corp. v. Nat'l Res. Def. Council, Inc. (435 U.S. 519 (1978)): Reinforced the distinction between procedural requirements and substantive limits; lack of notice-and-comment does not itself expand delegated power for nondelegation purposes.

D. Standing and redressability

  • FDA. v. All. for Hippocratic Med. (602 U.S. 367 (2024)) and Sanchez v. R.G.L. (761 F.3d 495 (5th Cir. 2014)): Framed redressability as requiring only potential injury reduction, not complete relief—supporting standing despite Treasury/IRS enforcement roles.
  • Novartis Pharms. Corp. v. Sec'y United States Dep't of Health & Hum. Servs. (155 F.4th 223 (3d Cir. 2025)): Cited as persuasive authority that CMS’s role in the statutory scheme can satisfy causation/redressability for standing.
  • National Infusion Ctr. Ass'n v. Becerra (" NICA I") (116 F.4th 488 (5th Cir. 2024)): The panel distinguished standing analysis from merits analysis; standing does not establish the existence of a protected property interest for due process purposes.

E. Anti-Injunction Act and its exceptions

  • National Fed'n of Indep. Bus. v. Sebelius (" NFIB") (567 U.S. 519 (2012)): Confirmed that Congress’s label (“tax”) controls for AIA purposes.
  • CIC Servs., LLC v. IRS (593 U.S. 209 (2021)): Rejected any regulatory vs. revenue-raising distinction for AIA applicability.
  • South Carolina v. Regan (465 U.S. 367 (1984)): The decisive exception; the Fifth Circuit held the refund-suit pathway is not an “alternative remedy” when it is economically unrealistic in light of massive continuing accrual.
  • Flora v. United States (362 U.S. 145 (1960)): The Government relied on a divisible-tax notion; the Fifth Circuit found the cited footnote and IRS forbearance policy too uncertain to ensure a viable alternative remedy.
  • Webster v. Doe (486 U.S. 592 (1988)): Supported a clear-statement caution against interpreting statutes to preclude any judicial forum for colorable constitutional claims.
  • Hotze v. Burwell (784 F.3d 984 (5th Cir. 2015)), Franklin v. United States (49 F.4th 429 (5th Cir. 2022)), and In re Westmoreland Coal Co. (968 F.3d 526 (5th Cir. 2020)): Provided the Fifth Circuit’s AIA framework and remedial expectations in tax disputes.

F. Excessive Fines Clause

  • United States v. Bajakajian (524 U.S. 321 (1998)) and Austin v. United States (509 U.S. 602 (1993)): Anchored the principle that the Clause applies to payments extracted as punishment; the panel emphasized the centrality of criminal or quasi-criminal sanctioning.
  • Alexander v. United States (509 U.S. 544 (1993)) and Timbs v. Indiana (586 U.S. 146 (2019)): Reinforced that the Supreme Court’s applications are in forfeiture/crime-adjacent contexts, not regulatory tax pressure untethered to criminality.

G. Due process property/liberty interests in federal programs

  • Board of Regents of State Colls. v. Roth (408 U.S. 564 (1972)): The baseline “legitimate claim of entitlement” requirement; mere expectations are not property.
  • Perkins v. Lukens Steel Co. (310 U.S. 113 (1940)): The Government may set purchase terms; supports rejecting an entitlement to sell to Medicare at preferred prices.
  • Biotechnology Indus. Org. v. District of Columbia (496 F.3d 1362 (Fed. Cir. 2007)): Patent law grants no affirmative right to sell—still less at any particular price—undercutting the “patent profits” framing.
  • Boehringer Ingelheim Pharms., Inc. v. U.S. Dep't of Health & Hum. Servs. (150 F.4th 76 (2d Cir. 2025)) and Baptist Hosp. E. v. Sec'y U.S. Dep't of Health & Hum. Servs. (802 F.2d 860 (6th Cir. 1986)): Voluntary participation in price-regulated programs defeats claimed deprivation of property interests by regulated pricing.
  • Garelick v. Sullivan (987 F.2d 913 (2d Cir. 1993)): Economic hardship is not legal compulsion; relied on to reject coercion theories as a due process hook.
  • Bristol Myers Squibb Co. v. Sec'y U.S. Dep't of Health & Hum. Servs. (155 F.4th 245 (3d Cir. 2025)) and Teva Pharms. USA, Inc. v. Kennedy (No. 25-5425, 2026 WL 2409591 (D.C. Cir. Aug. 18, 2026)): Limited the relevance of NFIB’s state-federalism coercion analysis to private manufacturers.
  • Shah v. Azar (920 F.3d 987 (5th Cir. 2019)), Rock River Health Care, LLC v. Eagleson (14 F.4th 768 (7th Cir. 2021)), and Furlong v. Shalala (156 F.3d 384 (2d Cir. 1998)): Providers may have interests in receiving whatever the duly established rate is, but not in preferred levels or continued participation on preferred terms.
  • Abigail All. for Better Access to Developmental Drugs v. von Eschenbach (495 F.3d 695 (D.C. Cir. 2007) (en banc)): Supported rejecting a claimed fundamental due process right of access to medicines (there, experimental drugs; here, Medicare/Medicaid-covered medicines).
  • AstraZeneca Pharms. LP v. Sec'y U.S. Dep't of Health & Hum. Servs. (137 F.4th 116 (3d Cir. 2025)) and Novo Nordisk Inc. v. Sec'y U.S. Dep't of Health & Hum. Servs. (154 F.4th 105 (3d Cir. 2025)): Persuasive support that the Program regulates what CMS reimburses and does not create a protected entitlement to higher prices.

3.2 Legal Reasoning

A. Nondelegation: “maximum fair price” as bounded discretion

The court treated the Program as a classic implementation delegation: Congress set the policy (reduce Medicare drug expenditures by negotiated prices for a defined set of high-spend, single-source drugs) and supplied operational detail (selection criteria, timelines, ceilings, negotiation steps, publication duties). The opinion’s key move is converting “fair” from rhetoric into a statutory constraint: because HHS “shall consider” enumerated cost and market factors, “fair” functions as a floor in the same way “sufficient” did in FCC v. Consumers' Rsch.. This rejects the plaintiffs’ attempt to leverage the absence of an express price floor into “boundless discretion.”

B. “Combination theory”: procedural insulation does not equal unconstitutional delegation

The panel acknowledged that judicial review can safeguard against “excesses” (American Power & Light Co. v. SEC), but found no authority that removing review itself creates a nondelegation violation. Similarly, the temporary use of “program guidance” without notice-and-comment did not alter the constitutional question, because nondelegation asks whether Congress delegated legislative power without an intelligible principle—not whether the agency followed optimal participatory procedures. The court left open, in a limited way, that absence of review might be “relevant” as a factor, but held it was not dispositive and could not tip this statute into invalidity.

C. Anti-Injunction Act: a practical, remedial reading of “alternative remedy”

The opinion’s most distinct contribution is its application of South Carolina v. Regan to the IRA excise tax. Even though the exaction is a “tax” under NFIB, the court refused to treat a refund suit as a meaningful alternative when the tax’s structure (escalating to 95%) and the litigation’s duration would impose potentially ruinous continuing liability. By invoking Webster v. Doe’s warning against interpretations that deny any judicial forum for constitutional claims, the court framed its reading as both remedial and constitutional-avoidance oriented.

D. Excessive Fines: punitive character requires a criminal or quasi-criminal anchor

After finding jurisdiction, the court held the excise tax is not a “fine” because it is not imposed “as punishment for some offense” (United States v. Bajakajian). The tax is triggered by nonparticipation in a lawful regulatory program tied to Medicare reimbursement; the plaintiffs’ evidence of “pressure” and deterrent design did not substitute for the criminality nexus that runs through Austin v. United States, Timbs v. Indiana, and related cases. This reasoning narrows Excessive Fines Clause applicability in high-stakes regulatory tax regimes where Congress uses severe financial incentives without criminal predicates.

E. Due process: no entitlement to preferred Medicare economics

The court treated the asserted interests as economic expectations rather than Roth-style entitlements: manufacturers have no property right to sell to Medicare at a higher price than the Government will reimburse (Perkins v. Lukens Steel Co.); patents do not confer a right to sell at any price (Biotechnology Indus. Org. v. District of Columbia); and “voluntary” participation in Medicare/Medicaid defeats deprivation claims (Boehringer Ingelheim Pharms., Inc. v. U.S. Dep't of Health & Hum. Servs.). For providers, Shah v. Azar foreclosed any broad entitlement to continued reimbursement on preferred terms. For patients, the court declined to recognize a due process right to particular covered medicines, analogizing to Abigail All. for Better Access to Developmental Drugs v. von Eschenbach.

3.3 Impact

  • Judicial review of the IRA excise tax despite the AIA: The Fifth Circuit’s Regan analysis offers a roadmap for pre-enforcement constitutional challenges to taxes that are nominally refundable but practically unchallengeable due to catastrophic accrual risk. This may influence how courts assess “alternative remedy” in future high-rate or escalating tax schemes designed primarily to compel compliance.
  • Nondelegation doctrine remains stable post-Consumers’ Research: The decision reinforces that detailed statutory architecture plus mandatory factors can satisfy intelligible-principle review even where Congress directs an agency to achieve the “lowest” (yet “fair”) price.
  • Excessive Fines Clause containment: By insisting on a criminal/quasi-criminal connection, the opinion limits Eighth Amendment arguments against aggressive regulatory taxes that function as deterrents but are not tied to an “offense.”
  • Due process challenges to Medicare pricing face steep odds: The opinion aligns the Fifth Circuit with other circuits rejecting asserted entitlements to particular reimbursement economics, and it underscores the doctrinal power of characterizing Medicare participation as legally voluntary even when economically consequential.
  • Post-Loper Bright statutory interpretation: The court’s “best reading” approach to narrowing § 5000D’s reach signals continued judicial willingness to adopt context-driven textual readings—especially where broader readings create constitutional friction.

4. Complex Concepts Simplified

  • Nondelegation doctrine: Congress cannot hand over pure lawmaking power to agencies; but it can authorize agencies to fill in details if Congress provides an “intelligible principle” (a meaningful goal plus boundaries).
  • Intelligible principle: A workable set of directions. It need not be mathematically precise; it can use evaluative terms (like “fair”) so long as the statute supplies criteria that give those terms content.
  • Anti-Injunction Act (AIA): A jurisdictional bar preventing lawsuits whose purpose is to stop tax assessment/collection before payment—normally forcing taxpayers into pay-first, sue-for-refund litigation.
  • South Carolina v. Regan exception: The AIA does not apply when Congress has not provided the plaintiff a realistic alternative legal avenue to contest the tax’s validity.
  • Excessive Fines Clause: Limits punishments, not ordinary taxes. Courts look for punishment tied to an “offense,” typically criminal or quasi-criminal conduct.
  • Due process “property interest”: Not every economic loss counts. A plaintiff must show a legally recognized entitlement (not just a desire for better prices or higher reimbursement).

5. Conclusion

Natl Infusion Center v. Kennedy is a significant Fifth Circuit validation of the IRA’s Medicare Drug Price Negotiation Program. It holds that Congress provided sufficient statutory guidance to satisfy nondelegation; that limiting review and notice-and-comment does not convert the delegation into an unconstitutional transfer of legislative power; that the AIA does not bar a pre-enforcement constitutional challenge when a refund suit is economically unrealistic under Regan; that the excise tax nonetheless is not an Excessive Fines “fine” absent a criminal-punishment anchor; and that manufacturers, providers, and patients failed to identify protected due process entitlements to preferred Medicare pricing outcomes.