Health Law Daily Wrap Up, ADMINISTRATION OF MEDICARE/MEDICAID PROGRAMS—6th Cir.: Regional chambers of commerce lack standing to challenge Medicare Drug Negotiation Program, (Aug 8, 2025)

By Sherri M. Schroeder, J.D.

According to the court, the constitutionality of a federal program applicable only to pharmaceutical manufacturers is not germane to the chambers' purpose of promoting regional business.

The Sixth Circuit court of appeals has agreed with the decision by the U.S. District Court for the Southern District of Ohio concerning the challenge by three regional chambers of commerce to the constitutionality of the Medicare/Medicaid Drug Price Negotiation Program. The district court had dismissed their complaint for improper venue because none of the regional chambers could satisfy the test for associational standing. Agreeing the interests in the lawsuit were not germane to the purposes of the regional chambers and finding the district court had properly disposed of the claims after a finding of improper venue, the appeals court affirmed the district court’s judgment (Dayton Area Chamber of Commerce v. Kennedy, No. 24-3868 (6th Cir. Aug 6. 2025)).

Chambers’ claims. The Dayton Area, Ohio, and Michigan Chambers of Commerce, along with the Chamber of Commerce of the United States of America, challenged the constitutionality of the Drug Price Negotiation Program on behalf of their pharmaceutical-manufacturer members. They claimed that the Program was the government’s attempt to “displace[] market forces and set[] prices on targeted products through central planning.” In addition to contending that Congress had exceed its legislative powers, the chambers based their challenge on the Due Process Clause, Excessive Fines Clause, and the First Amendment.

The government moved to dismiss the complaint on the basis that the Dayton Chamber lacked associational standing because the lawsuit was not germane to the Dayton Chamber’s purposes, which made venue in the Western Division of the Southern District of Ohio improper. The district court held that none of the regional chambers could satisfy the test for associational standing and then declined to transfer the case to the Eastern Division because the Ohio chamber also lacked associational standing. It therefore dismissed the case for improper venue.

Germane interests. Under the doctrine of associational standing, an association may sue on behalf of its members if three requirements are met. According to the court, the requirement important to this case is that the interests the association seeks to protect must be germane to the organization’s purpose. However, the court noted, “Whether the interests at stake in this case... are germane to the purpose of the Dayton Chamber... is far from obvious.” The court also noted that the Dayton Chamber acknowledged that its primary purpose was to advocate for a business-friendly environment in the Dayton region. “And although Plaintiffs collectively argue that they have a broader purpose of safeguarding the principles of free enterprise and advocating for a business-friendly legislative and regulatory environment, the interests that they aim to protect are greatly attenuated from the regional interests of the Dayton Chamber,” the court stated.

The court then went on to say that in almost every case where a challenge to associational standing has failed, the “germaneness” (which the court defined as “the relationship between the subject of the lawsuit and the purpose of the plaintiff association”) has been much more direct. However, where a challenge to associational standing has been successful, this “germaneness” has been found too remote, according to the court. The court then described the case at hand as being closer to those cases holding that an association lacked standing to sue. This was because the court found little reason to believe that the Dayton Chamber had any particular knowledge or experience in the lawsuit’s subject matter. Instead, it appeared to the court that the lawsuit was more of a “stalking horse” for a particular drug company and its subsidiary in seeking a more favorable venue than the companies could obtain on their own.

Stating that “[w]ithout a limiting principle, a regional chamber of commerce could oppose any government regulation that impacts the national economy so long as a single member has individual standing to challenge the regulation,” the court found the lawsuit’s subject matter—the constitutionality of a federal program applicable only to pharmaceutical manufacturers—was not germane to the Dayton Area, Ohio, or Michigan chambers’ purpose of promoting regional business.

The court outlined two caveats to its ruling. “First,” stated the court, “our holding that the Dayton Chamber’s purposes are not germane to the interests in this suit should not be read to mean that only associations with explicitly national purposes may represent interest that are national in nature.” Per the court, the fact that a federal law applies nationwide often means that states and regions within the country are impacted. The important difference for the court was that in the case at hand the regional purposes of the Dayton Chamber were “far removed” from the interests challenged in the suit.

Second, the court noted that although neither of the drug manufacturers at the heart of the case had headquarters or any facilities in the Dayton area, this was not fatal to associational standing, as the district court seemed to imply. Per the court, “[C]ompanies that are based in one place often have business interests in other places in which they sell their products, and associations in those other places might be well equipped to represent the interests of their nonresident members.” For the court, it was the lack of headquarters or facilities in the regional area covered by the chambers combined with the lack of any direct connection between the Dayton Chamber’s purposes and the issues at stake in the lawsuit that was fatal to associational standing.

The case is No. 24-3868.

Judge: Gilman, R.

Attorneys: Jeffrey S. Bucholtz (King & Spalding LLP) for Dayton Area Chamber of Commerce. Maxwell A. Baldi, U.S. Department of Justice, for Robert F. Kennedy.

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