Legal Resources for State Drug Cost Containment

This resource library features Legal Analysis written by NASHP experts that address issues raised by the pharmaceutical industry. Also included are State Legal Filings that provide summaries and links to state documents that defend their drug cost containment actions in federal court.

NASHP Legal Analysis

These legal analyses, written by NASHP experts, address key issues that the pharmaceutical industry raises in its legal challenges of state actions to contain drug costs.

Navigating Legal Challenges to State Efforts to Control Drug Prices: Pharmacy Benefit Manager Regulation, Anti-Price-Gouging Laws, and Price Transparency, September 2019. This legal brief analyzes the legal arguments industry groups have made against pharmacy benefit manager regulations, anti-price-gouging laws, and drug cost transparency requirements, including that they violate the Dormant Commerce Clause, the Employee Retirement Income Security Act, and federal patent and trade secret laws. The in-depth analysis offers suggestions to states considering similar legislative actions in order to minimize their risk of legal challenges.

Dormant Commerce Clause

When states pass laws designed to control prescription drug costs, the pharmaceutical industry often responds with lawsuits claiming states are hindering interstate commerce and violating the federal Dormant Commerce Clause (DCC). NASHP’s legal experts believe states can craft drug cost policies that can withstand industry challenges.

This brief by Anna Zaret, JD, and Darien Shankse, PhD, JD, MA, provides insight and analysis about DCC case law and highlights what state policymakers need to consider when drafting drug cost polices.

NASHP’s blog about the Dormant Commerce Clause and drug cost regulation.

NASHP’s easy-to-understand table featuring Dormant Commerce Clause’s “Dos and Don’ts.”

Patent Law Analysis

This brief by Robin Feldman, Betty Chang Rowe, Rabiah Oral, Amy Y. Gu, and Katherine Gudiksen provides a Patent Law Analysis of NASHP Rate-Setting Model Act.

NASHP’s blog to learn more about Patent Law Analysis and drug cost regulation.

A Glossary of  Pharmaceutical Terms

The terms used to describe different classes of drugs, the various players in the pharmaceutical industry, and drug approval and marketing can be complicated. NASHP’s easy-to-use glossary explains these complex references.

State Legal Filings

Below are links to pertinent state legal documents filed in response to pharmaceutical industry challenges of drug cost containment legislation. This is not a comprehensive list, however it provides information about what arguments states are making to defend their legislation.

California – Drug Price Transparency (SB 17)

The Pharmaceutical Research and Manufacturers of America (PhRMA) quickly filed suit in US District Court, Eastern District of California, challenging the legality of the new law. Below are the case filings:

PhRMA’s Initial Complaint challenging California’s new law  12/8/2017

California’s Motion to Dismiss PhRMA’s lawsuit 1/26/2018

PhRMA’s response to California’s motion to dismiss 2/26/2018

PhRMA’s Request for Judicial Notice 2/26/2018

US District Court Judge Morrison England’s decision dismissing PhRMA’s lawsuit 8/30/2018

PhRMA’s refiled, amended lawsuit challenging California’s law 9/28/2018

US District Court Judge Morrison England’s decision allowing PhRMA’s amended lawsuit 7/31/2019

Maryland – Anti-Price-Gouging (HB 631) 

The Association for Accessible Medicines (AAM), formerly the Generic Pharmaceutical Association, filed a lawsuit challenging Maryland’s anti-price-gouging law in US District Court for the District of Maryland. Below are the case filings:

AAM’s Initial Complaint and request for a preliminary injunction challenging Maryland’s new law 7/6/2017

Maryland’s Motion to Dismiss AAM’s complaint 8/14/2017

Maryland’s Filing Opposing AAM’s Motion for an immediate preliminary injunction against the law’s enactment 8/15/2017

US District Court Judge Marvin J. Garbis dismissal of much of AAM’s motion for a preliminary injunction 9/29/2017

AAM’s Motion for a Temporary Injunction, asking for an immediate injunction against the law’s enactment 10/12/2017

US Court of Appeals for the Fourth Circuit Decision on AAM’s appeal. This decision struck down Maryland’s anti-price-gouging legislation. 4/13/2018

Maryland Attorney General’s request that the US Supreme Court review the Fourth Circuit decision that overturned Maryland’s anti-price-gouging law and answer the question: “Does the Commerce Clause prohibit a state from protecting consumer access to essential off-patent and generic prescription drugs by requiring manufacturers to refrain from unconscionably raising the price of those drugs sold in the state?” 10/2018

Nevada – Drug Price Transparency (SB 539) 

The Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Innovations Organization (BIO) challenged Nevada’s drug cost transparency law in US District Court for the District of Nevada. PhRMA and BIO dropped the lawsuit in June 2018 after Nevada’s Department of Health and Human Services adopted regulations that allow manufacturers and pharmacy benefit managers to request that specific price report information be kept confidential. Below are the case filings and new regulations:

PhRMA and BIO’s Initial Complaint challenging Nevada’s new law 9/1/2017

The Drug Manufacturers’ Request for an Immediate Injunction to stop implementation of the law 9/13/2017

US District Court Judge James Mahan’s Ruling that denied the manufactures’ request for an injunction 10/17/2017

Nevada Department of Health and Human Services implementing regulations 5/31/2018

Joint Status Report that ended the lawsuit 6/28/2018