Aimed at making insulin more affordable and accessible for Minnesotans, the law is now the subject of a federal lawsuit filed one night before it took effect. Pharmaceutical companies allege that it violates their rights under the Fifth Amendment to the U.S. Constitution.
Asked for an update on the case by U.S. Sen. Tina Smith, Ellison said his office has “a very strong, able counsel who’s lead on it.”
“The law remains in effect for now. And I’m confident that it will,” he said.
Enacted by the Minnesota Legislature and signed by Gov. Tim Walz in April, the law requires insulin manufacturers to expand eligibility for their financial assistance programs and set aside a supply of the drug for uninsured and low-income Minnesotans. A vial of insulin, which people with diabetes use to regulate their blood sugar levels, can last for days or weeks depending on an individual’s needs, but can cost hundreds of dollars, quickly becoming difficult to afford.
But in the lawsuit filed in the U.S. court for the district of Minnesota in July, the Pharmaceutical Research and Manufacturers Association, or PhRMA, argues that the law runs afoul of the Fifth Amendment’s takings clause, which prohibits the government seizing of private property without “just compensation.” PhRMA and other petitioners to the case have motioned for the court to strike down the law by summary disposition, a type of court judgement entered without a full trial.
Ellison’s office, meanwhile, has motioned to dismiss the case, a hearing on which is scheduled for late October.
Speakers at Monday’s roundtable, including Ellison, likened the rising cost of insulin and other drugs to price gouging and called for greater oversight of the pharmaceutical industry. The attorney general was particularly critical of the practice known as “evergreening,” whereby manufacturers make minimal and periodic changes to drug formulas, thus allowing them to retain patent rights and prevent generic versions from entering production.
The rising cost of drugs and medication is particularly burdensome for elderly citizens, said American Association of Retired Persons state director for Minnesota Erin Parrish, whose group is advocating for legislation in Minnesota that would create a drug affordability commission.
“Reforms need to be targeted at the root cause of the problem, which is the price set by drug manufacturers. It is not enough simply to shift costs around the system,” she said.
PhRMA has argued that manufacturers, however, have little control over the price of insulin borne by consumers. Costs are determined by insurance companies, the group has said, as well as pharmacy benefit managers and government entities.
Representatives of PhRMA had not yet responded to requests for comment as of Monday afternoon.
Officials have been particularly critical of PhRMA for filing a lawsuit even after industry representatives assured lawmakers in Minnesota that they had no plans to do so. For one to be filed one night before the insulin law took effect, Ellison said Monday, further underscores the industry’s dishonesty.
The attorney general said he does not object to the ability of drug makers to turn a profit but was critical in his comments of what he described as their monopolistic status and influence in politics. He and other state attorneys general are taking “a brand new look” at antitrust options in response, he said.
Stephen Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota, was similarly critical of the industry during Monday’s roundtable. Drug prices have risen far faster than those of other goods, he said, and require oversight that their are seemingly unwilling to provide.
“The time has come, since drug companies won’t negotiate fairly…we need a process,” he said.