Pharma fell short in initial attempts to derail a new drug pricing measure in California, but the industry is not giving up its fight. PhRMA, the industry’s largest trade group, sued state officials on Friday over a law it argues has no shortage of fatal flaws.
California’s SB 17 is “poorly conceived,” “counterproductive” and “unconstitutional,” according to a 35-page lawsuit from PhRMA against California Governor Jerry Brown and Robert David, director of the California Office of Statewide Health Planning and Development (OSHPD). The industry trade group argues that California’s new law, set to take effect at the start of 2019, “intentionally exports California’s policy choices regarding prescription drug pricing on the entire nation.”
The law will require companies to give 60-day notice of price hikes above 16% when combined with increases from the previous two years. Drugmakers must also justify their increases under the law, and insurers will have to provide information about how drug costs affect premiums. Some of the information will be public on a government website.
PhRMA says SB 17 forces drugmakers to “publicly convey and implicitly endorse the state’s position that the manufacturers are to blame for the allegedly inflated prices of prescription drugs.” The group adds that the bill “incorrectly and unfairly singles them out for public condemnation.” According to the organization, the law violates the First Amendment and the Commerce Clause, and is unconstitutionally vague. A spokesperson for California's OSHPD declined to comment on the lawsuit.
California had to undergo a fight from pharma just to pass the bill and is already now running into more pushback as its implementation is about one year away. The bill’s author, state senator Ed Hernandez, said in a statement on Friday that the “lawsuit is just another example of Big Pharma refusing to accept any responsibility for the skyrocketing costs of prescription drugs.
“The idea that anyone other than drug companies is responsible for price increases is absurd,” he continued. “I’m confident the law will be upheld.”
The lawsuit is only the latest between the pharma industry and states as drug pricing remains a contentious topic around the country. Despite years of talk in Washington, D.C., lawmakers in Congress haven’t advanced any major proposals on the idea, and states are increasingly taking the issue into their own hands.
That strategy is proving tricky, however, as the drug industry has now sued California, Maryland and Nevada for their respective attempts to take on drug prices. PhRMA is arguing in its lawsuits against both California and Nevada that their proposed laws are “unprecedented and unconstitutional.”
Because Maryland’s law took on “unconscionable” price hikes in the generic sector, another trade group—the Association for Accessible Medicines—sued against that bill. In each case, drugmakers argued that attempts to regulate drug prices at the state level would affect commerce nationally or outside of the state, making the laws unconstitutional.
Elsewhere in government, FDA Commissioner Scott Gottlieb, M.D., and his agency have been working to take on high drug expenses by increasing competition and fighting “gaming” of regulations by drugmakers.