Drug Industry Files Suit to Halt California’s Drug Price Law

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The trade group representing U.S. drugmakers said it has a filed a lawsuit to stop California from implementing a law aimed at reining in prescription drug prices.

The Pharmaceutical Research and Manufacturers of America, in a statement, said it filed litigation in the U.S. District Court for the Eastern District of California challenging a state law requiring drug manufacturers to give notice and a justification for price increases of certain drugs.

The law, Senate Bill 17, was signed by California Governor Jerry Brown in October and is set to take effect Jan. 1, 2019.

The law requires drug manufacturers to give 60 days notice if prices rise more than 16 percent over a two-year period. California’s legislation is seen as a model that other states may following after steep price hikes by some companies.

Valeant Pharmaceuticals International Inc raised the price of heart medications Isuprel by about 720 percent and Nitropress by 310 percent, after acquiring them in 2015. Mylan NV raised the price of its life-saving EpiPen six-fold between 2008 and 2016.

PhRMA said California’s statute “attempts to dictate national health care policy related to drug prices in violation of the United States Constitution.”

It is seeking to have the law declared unconstitutional on the grounds that it attempts to regulate beyond the state’s borders and because it is too vague.

Governor Brown’s office did not respond to a request for comment. The lawsuitalso names Robert David, director of the California Office of Statewide Health Planning and Development, who could not be immediately reached for comment.

The trade group has also sued the state of Nevada, which in June enacted a measure requiring diabetes drugmakers that have raised list prices by a certain amount to disclose profits and other information or face a fine of $5,000 a day.

(Reporting by Beasley in Los Angeles; Editing by Lisa Shumaker)