Appeals Court Upholds Oregon Drug Pricing Transparency Law

According to Reuters, a divided 9th U.S. Circuit Court of Appeals panel ruled 2-1 that the 2018 law, House Bill 4005, does not violate drugmakers’ constitutional rights. The Pharmaceutical Research and Manufacturers of America (PhRMA) had argued that the measure infringed on free speech and amounted to an unlawful taking of private property.

The legislation mandates that companies report data on revenue and pricing for medications costing more than $100 per month or those that have experienced steep price hikes. The state may publish the information online, though trade secrets can only be disclosed if deemed in the public interest.

PhRMA, which sued in 2019, claimed the law forces drugmakers to adopt Oregon’s stance that they are largely responsible for rising drug costs and could require disclosure of sensitive information. But the appeals court disagreed, noting that the reporting requirements involve marketing information often already publicly available. Per Reuters, Circuit Judge Lucy Koh, joined by Judge Jennifer Sung, wrote that such material constitutes commercial speech, which is subject to greater regulation.

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The ruling overturned a February 2024 decision by U.S. District Judge Michael Mosman in Portland, who had sided with PhRMA. Mosman previously found the statute unconstitutional under the First and Fifth Amendments, partly because the state had not sufficiently demonstrated how the law would help lower drug costs.

Oregon’s victory was backed by more than 21 state attorneys general, who filed a brief arguing that the law provides valuable information that could aid other states in crafting policies to rein in pharmaceutical spending.

Not all judges on the panel agreed. Circuit Judge Carlos Bea issued a partial dissent, supporting PhRMA’s First Amendment argument.

The case, PhRMA v. Stolfi, highlights the ongoing legal battles between states seeking to curb soaring drug prices and pharmaceutical companies fighting back against such measures.