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Pharma suit dismissed in California: State can require notice of drug price hikes

Written by Diane Archer

Ed Silverman reports for StatNews that a federal judge in California dismissed a Pharma lawsuit which attempted to block a state consumer protection law. The law requires drug makers to disclose and justify some price hikes in advance.

The judge ruled that the court had no authority to hear the case based on Pharma’s submissions. The judge further ruled that Pharma had failed to demonstrate any potential harm from the law. The judge did give Pharma the ability to refile its lawsuit if it could show harm.

Pharma claims the California law is unconstitutional, violating free speech and interstate commerce. Pharma also blamed the Pharmacy Benefit Managers (PBMs)–the middlemen who decide which drugs an insurer will cover and at what copay level–for increases in the list price of drugs. And, it claimed the law should hold the PBMs accountable.

The 2017 California law obligates pharmaceutical companies to let health insurers and government health plans know at least 60 days in advance of a 16 percent hike or more, over two years, in the list price of all drugs that cost more than $40. The pharmaceutical companies are also obligated to explain why they are raising the price of these drugs.

The law may be working to keep at least some drug prices down. A few pharmaceutical companies let California health plans know that they were not going to raise prices on some drugs or they were going to raise prices less.

Here’s more from Just Care:

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