Drug Companies Sue California Over Price Law

CALIFORNIA -- Drug companies this week filed a lawsuit against the state of California over a new law that will require drug makers to give advanced notice to any price increases.

In a lawsuit, the Pharmaceutical Research and Manufacturers of America said Senate Bill 17, which takes effect Jan. 1, is "unprecedented and unconstitutional."

The bill, which was authored by state Sen. Ed Hernandez, D-West Covina, is aimed at promoting transparency as patients increasingly complain about price gouging.

PhRMA, which represents biopharmaceutical research companies, argues that the law "attempts to dictate national health care policy related to drug prices in violation of the United States Constitution, singles out drug manufacturers as the sole determinant of drug costs despite the significant role many other entities play in the costs patients pay, and will cause market distortions such as drug stockpiling and reduced competition."

The association is asking the court to provide a declaration that certain provisions of the law violates the U.S. Constitution.

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