Minnesota Sued Over New Law Providing Free Insulin to the Poor

A pharmaceutical industry trade group is suing Minnesota in an effort to block a new state law that provides free emergency insulin to patients who can’t afford it.

The Pharmaceutical Research and Manufacturers of America alleges that the law is unconstitutional because it would take drugmakers’ private property for public use without just compensation, according to a complaint filed Tuesday in the U.S. District Court for the District of Minnesota.

The lawsuit comes amid an ongoing debate over rising drug prices, particularly for insulin, a medication necessary to survival for more than 7 million Americans.

The group claims the law, which took effect Wednesday, violates the Takings Clause of the Fifth and Fourteenth Amendments.

The lawsuit names as defendants the members of the Minnesota Board of Pharmacy and MNsure, the state’s health insurance marketplace established under the Affordable Care Act.

The pharmacy board is still reviewing the lawsuit, but officials have no further comment, Cody Wiberg, the board’s executive director, said. Officials with MNsure are also reading the lawsuit, and the safety net program is currently moving forward as planned, spokeswoman Marie Harmon said.

The issue of insulin price increases gained prominence in the state in 2017, when 26-year-old Alec Smith died because he couldn’t afford the drug. Smith’s story helped spur the passage of the Minnesota law, which was named after him.

“To say we are frustrated is an understatement—frankly my family is outraged,” James Holt Jr., the father of Alec Smith, said Wednesday during a press conference with Minnesota Gov. Tim Walz.

“We will not allow PhRMA to ignore people dying because they can’t afford their medicine,” he added.

Private Property

PhRMA challenged the law’s “substantial and increasing” fines faced by those who don’t comply with the mandate to give away insulin for free.

“A state cannot simply commandeer private property to achieve its public policy goals,” the group said. It noted that all of its member companies that produce insulin provide the drug free of cost to many patients.

PhRMA wants the court to declare that the state law violates the U.S. Constitution, and it is seeking a permanent injunction barring enforcement.

“The Act’s implications are staggering,” the complaint said. “If Minnesota can appropriate privately manufactured insulin for distribution to its residents without paying any compensation—let alone just compensation—to the manufacturers, states can compel manufacturers to dispense other medications for free as well.”

Cost Debate

The inventor who discovered insulin in the 1920s famously sold the patent to the University of Toronto for $1 in the hope that anyone who needed it could afford it.

In the years since, the four most common types of insulin have seen their prices soar, with the average price per month rising to $450 in 2016, according to the Health Care Cost Institute.

Drugmakers who produce insulin argue that the increasing prices are a necessary part of innovation. They have developed more effective insulin formulations over the years and want to be compensated for that work, according to the complaint, which cites insulin work done by Eli Lilly and Co., Novo Nordisk, and Sanofi.

Patient advocates argue that the improvements to insulin have been small and incremental and that price increases are disproportional to any added benefit that newer, patent-protected formulations may provide.

They also say that pandemic-driven job losses and the accompanying loss of insurance could make the need for affordable insulin much greater, placing lives at risk.

“PhRMA’s lawsuit is the cruel and arrogant act of an industry that has slouched into entitlement and lost its way,” said Peter Maybarduk, director of the consumer advocacy group Public Citizen.

He added that “dozens of Americans have died from insulin rationing in the past several years.”

PhRMA’s complaint blames high insulin prices on insurance companies, pharmacy benefit managers, the government, and others. It pointed to drugmakers’ “robust” affordability programs, arguing that their discounts and other legally available alternatives are better than being forced to give insulin away for free.

Patient advocates say those programs are inaccessible to many poor patients who don’t know how to navigate the system.

Cause of Action: Violations of the Takings Clause, Commerce Clause.

Relief: Declaratory relief, permanent injunction, attorneys’ fees and costs.

Attorneys: Greene Espel PLLP represents PhRMA.

The case is Pharmaceutical Research and Manufacturers of America v. Williams, D. Minn., No. 0:20-cv-01497, complaint filed 6/30/20.