PhRMA challenged California’s drug price transparency law SB 17 alleging that the law is unconstitutional because it violates the Commerce Clause, the First Amendment, and the Due Process Clause. SB 17, which Gov. Jerry Brown signed 10/9/17, requires pharmaceutical companies to notify insurers and government health plans 60 days in advance of a price increase above a certain threshold and provide a rationale for it. After California federal court’s dismissed the original suit (PhRMA v. Brown) on procedural grounds, on September 28, 2018, PhRMA amended and refiled its complaint as PhRMA v. David.

PhRMA moved for summary judgment, but the court denied the motion prompting PhRMA to file an appeal to the Ninth Circuit. The reviewing court affirmed that the district court did not err in denying summary judgment and remanded the case to allow PhRMA the opportunity to present evidence to determine whether SB 17 actually regulates interstate commerce in the pharmaceutical drug market. However, due to a lack of evidence and instead of engaging in further proceedings, the parties agreed to have the case dismissed in its entirety with prejudice.

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