Statement on Litigation Challenging Constitutionality of Oregon’s HB 4005 and HB 2658

Washington, D.C. (December 9, 2019) — The Pharmaceutical Research and Manufacturers of America (PhRMA) today initiated litigation in the United States District Court for the District of Oregon challenging House Bill No. 4005, 2018 Or. L. Ch. 7 (“HB 4005”) and House Bill No. 2658, 2019 Or. L. Ch. 436 (“HB 2658”), two unconstitutional Oregon laws. The following is a statement by PhRMA Executive Vice President and General Counsel James C. Stansel about the litigation:

“There is no doubt that people in Oregon and across the country are struggling to access and afford the health care they need. Unfortunately, HB 4005 and HB 2658 do nothing to help them. It is our hope that these misguided and unconstitutional policies are put aside so that we can instead focus on reforms that will actually help people better afford their medicines, such as capping out-of-pocket costs, making monthly costs more predictable and sharing negotiated savings on medicines with patients.”

Additional information about the complaint:

PhRMA’s complaint argues that, separately and together, HB 4005 and HB 2658 violate the U.S. Constitution in several ways. Specifically:

  • Both HB 4005 and HB 2658 violate the Commerce Clause, which prohibits Oregon from foisting its policies on drug pricing onto other states.The laws also violate the First Amendment, by compelling speech and requiring manufacturers to justify their pricing decisions. 
  • The laws require manufacturers to publicly convey and implicitly endorse the State’s position that manufacturers are solely to blame for increased prescription drug costs. Yet the laws ignore other factors, such as the large rebates and discounts that insurance companies and pharmacy benefit managers receive but do not always pass on to patients.
  • Additionally, HB 4005 undercuts federal protection for sensitive trade secret information by compelling manufacturers to disclose such information to the state and then threatening to disclose that information to the public. Disclosure of that highly sensitive information would take away its value without just compensation, in violation of the Takings Clause. 

    PhRMA is seeking a declaration from the Court that HB 4005 and HB 2658 violate the U.S. Constitution and a permanent injunction barring implementation or enforcement of both laws. 

    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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