Drug Pricing Fight Boils Again in California

January 2018 – Some members of the California legislature have attempted in the past to put state controls on pharmaceutical pricing.  The current attempt is SB 17 (Hernandez), that measure would “publicly convey and implicitly endorse the state’s position that the manufacturers are to blame for the allegedly inflated prices of prescription drugs.”

The manufacturer’s trade organization PhRMA says that the bill “incorrectly and unfairly singles them out for public condemnation.” In their view the bill would violate both the Commerce Clause and the First Amendment, and is constitutionally vague.

SB 17, though hotly contested, passed the legislature in 2017, it is now facing additional pushback in the pre-implementation phase. This includes a lawsuit filed by PhRMA to challenge its constitutionality. Manufacturers point to the fact that those taking issue with pricing ignore the value drugs bring to the healthcare system and the fact that they are a minority of overall healthcare spending. .

States which have taken up a fight against pharmaceutical pricing, are unable to impact either the FDA process or federal patent protection laws. In its attempt to defend itself PhRMA has sued California (PhRMA v Brown), Maryland (Assn. Accessible Medicines v Frosh) and Nevada (PhRMA v Sandoval) 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.”