This week a California judge dismissed a lawsuit filed in December 2017 by the Pharmaceutical Research and Manufacturers of America (PhRMA) challenging CA S.B. 17. PhRMA had sought a declaration that Section 4 of S.B. 17 was unconstitutional and a permanent injunction preventing the state’s Governor and Director of the Office of Statewide Health Planning and Development (OSHPD) from implementing such section. Specifically, PhRMA alleged (i) the 60-day notice period required prior to an increase in wholesale acquisition cost (WAC) of more than 16% directly restricts list price nationwide in violation of the Commerce Clause; (ii) the report required prior to an increase in WAC compels speech in violation of the First Amendment; and (iii) S.B. 17 is unconstitutionally vague in violation of the Fourteenth Amendment’s due process clause.
In its order dismissing PhRMA’s complaint, the Court held the Complaint did not allege facts sufficient to initiate suit against the Governor, who has immunity in his role unless facts relevant to an exception for violating federal law are pled. Additionally, the Court held that PhRMA did not allege facts sufficient to establish PhRMA’s standing to bring suit because it has not shown that one of its pharmaceutical members has been injured or faces imminent injury. However, because these defects might be cured, the Court granted PhRMA leave to amend its complaint.