Chicago Business Litigation Lawyer Blog
The constitutional basis on which pharmaceutical legislation has been enacted is being challenged. Many Pharmaceutical Manufacturing companies are afraid that this new law has the capability of dictating health care policies when it comes to the governing of prices at which drugs can be sold. The complaint as filed has indicated that the sole determinant of price fixing should be manufacturers only, the inclusion of other entities reduces competition. To them, it is believed that prices can be thwarted as a result.
Other core belief systems are challenged including what lies in the public interest of the health forum and increases the scope for debate on the matter. Should having affordable access to medicine matter or does competition and profit for companies that gain matter? Whether public policy overrides or the victimization of the pharmaceutical companies will be seen.
The pharmaceutical company believed it was in its best interest to sue so that the legislationn is not enacted in other states. California is considered a state that is of high influence and for such reasons, a national trade group that represents 37 drug companies tried to defeat the bill.This same trade group for drugmakers cited concerns within its lawsuit that California’s law illegally tries to dictate national health policy. It further went to indicate that because the law is tied to a national measure of drug prices, advance notification requirement could restrict drugmakers’ ability to raise prices in other states. In what seems an otherwise futile attempt to sue, the main rationale behind the suit is also to ensure that the implementation does not become as at the national level, thereby reducing profit margin for such companies. The law requires pharmaceutical companies to notify insurers and government health plans at least 60 days before a planned price increase of more than 16 percent during a two-year period and to explain the rationale for the increase. The information would be available on a government website.
Pharmaceutical companies believe it is their right to fix prices, whereas, Californians believe that health care costs are excessive and medications are part of that contributing factor. The law was primarily introduced as a result of consumer rage due to high costs of prescriptive treatment which included new Hepatitis C medications and EpiPens to control allergic reactions.
The grounds of a law being vague and violating the First Amendment by forcing drug companies to justify price increases.The complaint has asked for the court to declare that certain SB 17 provisions violated the United States Constitution. It also asks the court to prohibit California from the implementation and enforcing of those particular provisions in the law. The lawsuit named Governor Brown as well as the Director of the California Office of Statewide Health Planning and Development Robert David, as defendants.
http://www.sfchronicle.com/news/medical/article/Drug-companies-sue-to-block-California-drug-price-12417429.php
https://weekherald.com/2017/12/09/california-sued-by-drug-companies-over-transparency-law.html
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