No Summary Judgment in Pharma Org’s Challenge to State Law

On Monday, in the California Eastern District, the Pharmaceutical Research and Manufacturers of America (PRMA) was denied a motion for summary judgment for its requested injunction to block a new California state law requiring certain public disclosures for drug manufacturers when prescription drug costs increase. 

The relevant law required the manufacturer to provide to all purchasers a disclaimer no later than 60 days prior to a price increase of more than 16% for a prescription drug created by the manufacturer. The disclaimer must explain why the price increase was warranted, including what benefits the changes provided and why the specific price increase was tailored to fit said benefit. 

PRMA argued that the disclosure requirement violated the First Amendment of the Constitution. The plaintiff argued that the law mandated a certain kind of commercial speech, without an appropriate state interest that would pass constitutional muster. Defendant Robert P. David in his official capacity as Director of the California Office of Statewide Health Planning and Development averred otherwise, claiming that the pricing disclosures furthered the state’s interest in regulating prescription drug costs by allowing consumers to know of drug pricing increases with enough advance notice that one could consider other options if needed. 

The court agreed with the defendant and denied the plaintiff’s motion for summary judgment, holding that the state’s interest in regulating prescription drug prices was narrowly tailored to the action of requiring public disclosure of certain drug price increases, as the disclosure was only required by the people originally setting the drug prices. Additionally, the opinion continued, the disclosure was neutral enough to ensure the manufacturer was not mandated to make content-based assertions or take a certain state-sanctioned viewpoint with said disclosure. 

The plaintiff is represented by Arnold & Porter and Downey Brand