Pharmaceutical Research v. Stuart Williams

64 F.4th 932
CourtCourt of Appeals for the Eighth Circuit
DecidedApril 3, 2023
Docket21-1731
StatusPublished
Cited by15 cases

This text of 64 F.4th 932 (Pharmaceutical Research v. Stuart Williams) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pharmaceutical Research v. Stuart Williams, 64 F.4th 932 (8th Cir. 2023).

Opinion

United States Court of Appeals For the Eighth Circuit ___________________________

No. 21-1731 ___________________________

Pharmaceutical Research and Manufacturers of America

lllllllllllllllllllllPlaintiff - Appellant

v.

Stuart T. Williams; Stacey Jassey; Mary Phipps; Andrew Behm; James Bialke; Amy Paradis; Rabih Nahas; Samantha Schirmer; Kendra Metz, all in their official capacities as members of the Minnesota Board of Pharmacy

lllllllllllllllllllllDefendants - Appellees

------------------------------

National Association of Manufacturers; Chamber of Commerce of the United States of America; Pacific Legal Foundation; Goldwater Institute

lllllllllllllllllllllAmici on Behalf of Appellant(s)

T1International; Minnesota #insulin4all; Nicole Smith-Holt; Nathan Loewy; Cindy Boyd; Abigail Hansmeyer; Mid-Minnesota Legal Aid; National Health Law Program

lllllllllllllllllllllAmici on Behalf of Appellee(s) ____________

Appeal from United States District Court for the District of Minnesota ____________ Submitted: December 15, 2021 Filed: April 3, 2023 ____________

Before SMITH, Chief Judge, GRUENDER and KOBES, Circuit Judges. ____________

SMITH, Chief Judge.

Pharmaceutical Research and Manufacturers of America (PhRMA) appeals the District of Minnesota’s dismissal order entered in favor of the members of the Minnesota Board of Pharmacy (Board)1 based on a lack of standing. PhRMA’s lawsuit alleged a Fifth Amendment Takings Clause claim challenging the Alec Smith Insulin Affordability Act (Act). The Act, enforced by the Board members, requires, among other things, that pharmaceutical companies provide certain prescription medications to qualifying applicants at no cost.

On June 30, 2020, PhRMA filed this suit on behalf of itself and three of its members—Eli Lilly and Company, Novo Nordisk Inc., and Sanofi—that manufacture most of the insulin sold in the United States and are subject to the Act. PhRMA alleged that the Act’s provisions violate the Takings Clause of the Fifth Amendment.2 PhRMA sued the Board members, in their official capacities, under 42 U.S.C. § 1983 and Ex Parte Young, 209 U.S. 123 (1908), seeking (1) a declaration that the Act is unconstitutional, and (2) an injunction barring its enforcement.

1 The Board members are Stuart Williams, Stacey Jassey, Mary Phipps, Andrew Behm, James Bialke, Amy Paradis, Rabih Nahas, Samantha Schirmer, and Kendra Metz. 2 PhRMA also argued that at least one of the Act’s exemptions violates the Commerce Clause. We need not address this claim, as PhRMA concedes the claim is moot.

-2- The Board members moved to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. PhRMA moved for summary judgment and conditional leave to file a supplemental complaint. The district court granted the Board members’ motion to dismiss for lack of standing, denied PhRMA’s motion for leave to file a supplemental complaint, denied PhRMA’s motion for summary judgment as moot, and dismissed the case without prejudice. This appeal ensued.

I. Background A. Factual Background Under the Act, manufacturers must provide insulin for free to Minnesota residents who meet certain criteria. See Minn. Stat. § 151.74, subdiv. 1(a). This “[i]nsulin safety net program” consists of two parts: the “Continuing [S]afety [N]et [P]rogram, id. § 151.74, subdiv. 4, and the “[U]rgent-[N]eed [S]afety [N]et [P]rogram,” id. § 151.74, subdiv. 2.

Under the Continuing Safety Net Program, manufacturers are mandated to provide any eligible individual with free insulin products. Manufacturers are tasked with reviewing applications to determine whether applicants meet the eligibility criteria. Id. § 151.74, subdiv. 5(a) (“Upon receipt of an application for the manufacturer's patient assistance program, the manufacturer shall process the application and determine eligibility.”). The manufacturer must then notify the applicant within ten business days of its decision. Id. If a manufacturer denies the products, applicants may appeal to a review panel created by the State’s Board of Pharmacy. Id. The review panel is empowered to overrule manufacturers with binding decisions. Id. § 151.74, subdiv. 8.

If a manufacturer determines that an applicant is eligible, it must “provide the individual with an eligibility statement or other indication that the individual has been determined eligible for the manufacturer’s patient assistance program.” Id. § 151.74,

-3- subdiv. 5(b). An individual with an eligibility statement may present it to a pharmacy to obtain free insulin for up to one year. Id.

A manufacturer must provide an eligible applicant who does not have private insurance with an eligibility statement. Id. But

[i]f the eligible individual has prescription drug coverage through an individual or group health plan, the manufacturer may determine that the individual’s insulin needs are better addressed through the use of the manufacturer’s co-payment assistance program, in which case, the manufacturer shall inform the individual and provide the individual with the necessary coupons to submit to a pharmacy. In no instance shall an eligible individual be required to pay more than the co-payment amount specified under subdivision 6, paragraph (e).

Id. § 151.74, subdiv. 5(c).

Once an individual receives a statement of eligibility from the manufacturer, the individual must submit that statement to the pharmacy. Id. § 151.74, subdiv. 6(a). “Upon receipt of an individual’s eligibility status, the pharmacy shall submit an order containing the name of the insulin product and the daily dosage amount as contained in a valid prescription to the product’s manufacturer.” Id. In turn, the manufacturer must “send to the pharmacy a 90-day supply of insulin . . . at no charge to the individual or pharmacy.” Id. § 151.74, subdiv. 6(c). Likewise, “the pharmacy shall provide the insulin to the individual at no charge to the individual” and “shall not seek reimbursement for the insulin received from the manufacturer or from any third- party payer.” Id. § 151.74, subdiv. 6(d). But “[t]he pharmacy may collect a co-payment from the individual to cover the pharmacy’s costs for processing and dispensing in an amount not to exceed $50 for each 90-day supply if the insulin is sent to the pharmacy.” Id. § 151.74, subdiv. 6(e). No portion of the co-payment goes to the manufacturer. See id. This process may be repeated throughout a full year of eligibility; “[u]pon receipt of a reorder from a pharmacy, the manufacturer must send

-4- to the pharmacy an additional 90-day supply of the product . . . at no charge to the individual or pharmacy.” Id. § 151.74, subdiv. 6(f).

Under the Urgent-Need Safety Net Program, manufacturers must provide a 30- day supply of free insulin to individuals who meet eligibility criteria. Id. § 151.74, subdiv. 2(a)–(b). “Upon receipt of a completed and signed application, the pharmacist shall dispense the prescribed insulin in an amount that will provide the individual with a 30-day supply.” Id. § 151.74, subdiv. 3(c). After dispensing the insulin, “[t]he pharmacy may submit to the manufacturer of the dispensed insulin product or to the manufacturer’s vendor a claim for payment.” Id. § 151.74, subdiv. 3(d). The manufacturer then has the options of either “reimburs[ing] the pharmacy in an amount that covers the pharmacy’s acquisition cost” or “send[ing] to the pharmacy a replacement supply of the same insulin as dispensed in the amount dispensed.” Id.

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64 F.4th 932, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pharmaceutical-research-v-stuart-williams-ca8-2023.