Washington, D.C. (June 30, 2020) — The Pharmaceutical Research and Manufacturers of America (PhRMA) today initiated litigation in the United States District Court for the District of Minnesota challenging House File 3100 (codified as Minn. Stat. 151.74 in Chapter 73 of the 2020 Session Laws) (“the Act”), an unconstitutional Minnesota law. The following is a statement by PhRMA Executive Vice President and General Counsel James C. Stansel about the litigation:

“No one living with diabetes should be forced to ration or go without their life-saving insulin because they can’t afford it. That’s why we’ve advocated for real policy reforms that states like Minnesota can pursue to make the system work better for patients and why manufacturers have long offered robust affordability programs that offer insulin for free or at reduced cost for those who need help. Unfortunately, this law is unconstitutional, overlooks common sense solutions to help patients afford their insulin and, despite its claims, still allows for patients to be charged at the pharmacy for the insulin that manufacturers are required to provide for free.” 

Additional information about the complaint:

PhRMA’s complaint alleges that the Act violates the U.S. Constitution. Specifically, the Act violates the Takings Clause of the Fifth and Fourteenth Amendments, which prohibits Minnesota from taking manufacturers’ private property for public use without just compensation. In this instance, the state of Minnesota is forcing insulin manufacturers to give their product to state residents for free, without any compensation from Minnesota in return. 

In addition to these constitutional concerns, the complaint also reinforces that insurance companies, pharmacy benefit managers (PBMs), the government and others dictate what most patients pay out of pocket for their insulin, not manufacturers; that manufacturers already offer robust affordability programs; and that the Act overlooks other, lawful solutions that could help patients afford their insulin. 

• For patients with private insurance, the out-of-pocket price they pay for insulin depends on the terms of their insurance plan and whether drug coverage is subject to a deductible, co-payment and/or coinsurance requirement. Insulin manufacturers play no role in establishing private health plans’ out-of-pocket requirements. The amount that Medicare and Medicaid beneficiaries must pay for drugs is determined by federal and state laws and regulations that establish and govern those programs. Individuals who are not covered by public or private insurance pay the price set by the pharmacy for the drug.
• The biopharmaceutical companies that research and develop insulin each individually offer affordability programs that provide discounts and assistance to significantly reduce patients’ costs, and also provide free insulin to a great number of patients who do not have health insurance coverage.
• There are a number of policy reforms Minnesota lawmakers could pursue without violating the U.S. Constitution. 

PhRMA is seeking a declaration from the Court that the Act violates the U.S. Constitution and a permanent injunction barring enforcement of the Act. 

A copy of the complaint is available here.

About PhRMA

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier, and more productive lives. Since 2000, PhRMA member companies have invested more than $900 billion in the search for new treatments and cures, including an estimated $79.6 billion in 2018 alone.

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