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November 16, 2020

TAKINGS CLAUSE

NHeLP joins in amicus brief in PhRMA v. Williams – where plaintiffs challenge Minnesota’s insulin-access statute
The Minnesota legislature approved the Alec Smith Insulin Affordability Act in 2020, which became effective on July 1.  Under the statute, eligible individuals with an urgent need for insulin can go to a pharmacy to receive a 30-day supply of insulin for a $35 co-pay, once every 12 months. The statute requires manufacturers who choose to market their insulins in the state to reimburse the pharmacy for the cost of the insulin or to provide a replacement supply at no cost. Following the initial supply, a longer term program becomes available to the patient, who may receive insulin in 90-day supplies for up to one year at a copy not greater than $50; again, the manufacturers must resupply the insulin to the pharmacy at no charge. Co-pays go to the pharmacy, not the manufacturers.  In general, eligible persons are those without insurance coverage providing insulin for $75 or less per month and who have a family income of 400% or less of the federal poverty level. The statute applies to manufacturers grossing $2 million or more in sales of insulin in Minnesota, and exempts insulin products having a WAC of $8 or less per mL. The Act permits manufacturers to utilize their existing affordability programs to fulfill the needs of qualifying patients.

On June 30, the Pharmaceutical Research and Manufacturers of America (PhRMA) filed suit in the District of Minnesota, challenging the statute as an unlawful takings, in violation of the Fifth Amendment.  Because enforcement of the statute was vested in the Minnesota Board of Pharmacy, the suit sought declaratory and injunctive relief against the Board of Pharmacy members in their official capacity, and against members of the Board of MNsure, the Minnesota health care marketplace.  The MNsure defendants were subsequently dismissed as parties in September because only the Board of Pharmacy is charged with the statute’s enforcement.

Minnesota moved to dismiss under Fed. R. Civ. P. 12(b)(1) and (6)  “because Defendants are immune from suit, PhRMA lacks standing, its claims are not ripe for adjudication, and its claims for equitable relief are foreclosed because just compensation remedies are available if the Act’s requirements do effect a taking.” Defendants also argue that the district court lacks jurisdiction. The state’s motion for dismissal argues that the “takings” have not occurred, and if they do, it is not a violation of the Takings Clause to effect such takings, only to do so without just compensation. Compensation is the remedy for a taking, the state argues, and the relief requested by PhRMA is foreclosed. The state also argues that PhRMA lacks standing to bring a takings claim on its own behalf, and its efforts to establishing representational standing fails, in part, in part because the claims asserted and the relief requested cannot be furthered without the participation of individual members of PhRMA, under tests established in Hunt v. Wash. State Apple Advertisement Commission, 432 U.S. 333 (1977).

Several organizations have filed to appear as amici, including the US Chamber of Commerce, the Goldwater Institute, and the National Association of Manufacturers. NHeLP joined with T1 International, Minnesota #insulin4all, Mid-Minnespta Legal Aid, and individual amici in filing a brief on November 5 in support of the state. [https://bit.ly/36HGOzj]  A hearing on PhRMA’s motion for summary judgment is scheduled on December 8, 2020. [Pharmaceutical Research and Manufacturers of America v. Williams et al., No. 0:20-cv-01497-DSD-DTS, D. Minn., filed June 30, 2020]