Drug makers seek to block drug price reporting law

The Pharmaceutical Research and Manufacturers of America has filed a motion for summary judgment to block enforcement of SB 17, a 2017 drug price transparency law.

The law requires insurers and health plans to report drug prices, and the reason for any increase, to the state's rate review process. The goal of the bill was to help determine how much these costs contribute to the overall costs of health premiums. In September, the Office of Statewide Health Planning and Development released its first report under the law, finding the median wholesale price of the drugs measured rose more than 8% annually over the previous three years.

The drug makers sued to block the law before it even went into effect. They claim SB 17 violated the U.S. Constitution as it "penalizes manufacturers for conduct that occurs exclusively outside California" and "prescribes policy on drug pricing for the entire United States." Pharmaceutical Researchers and Manufacturers of America v. David, 2:17-cv-02573-MCE-KJN (E.D. Cal., filed Dec. 8, 2017).

The motion filed Monday by the group's legal team, led by Downey Brand LLP partner Annie S. Amara1, states "There is no genuine dispute as to any material fact" and the law "violates the dormant commerce clause and the First Amendment." A hearing is set for May 14.

U.S. District Court Judge Morrison C. England Jr. dismissed the plaintiffs' complaint in 2018 but allowed an amended complaint to move forward last year though the state objected on standing grounds.

-- Malcolm Maclachlan