Image for Pharmaceutical Companies Seek Overthrow of Two Drug Pricing Bills

The leading drug company trade group has filed suit in federal court seeking to overthrow two Oregon bills dealing with drug pricing as unconstitutional. Oregon legislators who sponsored the measures predict the lawsuit would fail.

The lawsuit, filed in US District Court in Eugene, takes aim at House Bill 4005, which requires drug makers to submit a report when the price increase of expensive drugs exceeds a threshold level, and House Bill 2658, which requires a 60-day advanced notice of drug price increases to allow patients time to find cheaper alternatives.

The Pharmaceutical Research and Manufacturers of America, better known as PhRMA, says both bills “do nothing to help” Oregonians “struggling to access and afford health care they need.” A PhRMA spokesman says the two “misguided and unconstitutional” bills should be set aside and the focus instead should be on “capping out-of-pocket costs, making monthly costs more predictable and sharing negotiated savings on medicines with patients.”

The Portland Business Journal quoted Oregon House Health Care Chair Andrea Salinas as dismissing the lawsuit as “another attempt by PhRMA to avoid accountability. I think (the laws) are pretty defensible.”

The PBJ story also quotes bill sponsor Rep. Rob Nosse as saying, “Seems like there is already a strong precedent going back over a century in this country requiring corporate transparency in a variety of cases. I think this means our state has a good case and will be able to defend our law and its constitutionality.”

HB 4005, which passed in the 2018 legislative session, was backed by a coalition of hospitals, insurers, nurses, union and health care advocates, PBJ notes. The Oregon Coalition for Affordable Prescriptions issued a statement calling PhRMA’s filing a “desperate lawsuit” with “flimsy legal basis” to get rid of transparency measures that have “successfully highlighted egregious price-gouging by the pharmaceutical industry.” The coalition has promised to bring forward legislation in the 2020 session to allow lower-cost prescription drugs to be imported from Canada.

PhRMA’s lawsuit contends the two Oregon bills violate the Commerce Clause of the US Constitution, which gives Congress the express authority to regulate interstate commerce and by inference prohibits states from erecting barriers to trade among states. PhRMA also claims HB 4005 “undercuts federal protection for sensitive trade secret information,” in violations of the Takings Clause.

PhRMA attempted a similar legal strategy in California and saw its suit dismissed. “They tried a similar tactic in California after the legislature there passed a transparency law. It’s a desperate attempt to keep their price-gouging practices going with no rules and regulation – practices that are costing Oregonians their savings, their homes and even their lives,” said Numi Lee Griffith, a staff member with OSPIRG.

There was no immediate indication when the PhRMA lawsuit would receive a court hearing.