A federal judge is reviewing the constitutionality of Colorado’s new law regulating EpiPen pricing

A federal judge heard arguments Monday about whether a new Colorado law regulating the affordability of EpiPens and their generic equivalents should be blocked in part because it potentially violates the U.S. Constitution.

In June, Gov. Jared Polis signed a Democratic-backed measure aimed at curbing price increases for epinephrine auto-injectors, which can save the lives of people with severe allergic reactions. House Bill 1002 included two major requirements starting January 1, 2024: Limiting out-of-pocket costs to insured consumers to $60 for two packs of auto-injectors and requiring manufacturers to reimburse or supply pharmacies with price-regulated products. in some cases.

Teva Pharmaceuticals USA, Inc., which in 2018 received approval to market the first generic version of the EpiPen, did not oppose the $60 cap on customers, but acknowledged that Colorado had the right to impose price controls through insurance. However, it argued that the compensation or maintenance program violated its constitutional rights.

Specifically, Teva believes that the requirement to provide pharmacies with effectively free products violates the Fifth Amendment’s “takings clause,” which prohibits the government from taking private property “for public use without just compensation.”

Colorado “could impose a tax on the sale of EpiPens and then use that tax in its own fund for people who are uninsured,” attorney Jay P. Lefkowitz argued in court. “They can simply put a price cap and see what market forces do. They can support it more broadly in other ways. I think the state could even decide they want to come along and develop their own EpiPen.”

But, he added, “the only thing it cannot do is take this private property, which is clearly for public use, without just compensation.”

U.S. District Court Judge Daniel D. Domenico, who is considering Teva’s request to block part of the law before it takes effect, acknowledged the state’s interest in responding to the EpiPen “price increase.” However, he seemed to share Teva’s concern that the government had introduced a plan to buy its products.

“This is where you get one private party to hand over their property,” he said. “You’re saying to Teva in this case, ‘To help us solve this problem, we’re going to force you to give your property to someone else.'”

HB 1002 created an auto-injector affordability program for Colorado residents who don’t qualify for Medicare or Medicaid and also don’t have private insurance, subject to the $60 cap on an EpiPen two-pack. In this situation, the pharmacy can charge up to $60, but can then ask the manufacturer to supply it with new EpiPens for free. Alternatively, the manufacturer can reimburse the pharmacy the amount they paid for the EpiPens minus the amount paid by the customer at the counter.

In this year’s legislative session, lawmakers heard that while EpiPens cost about $8 to manufacture, the price for uninsured consumers can climb to more than $690. HB 1002 recognized that nearly 566,000 Colorado residents have life-threatening food allergies.







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Rep. Julie McCluskie receives a standing ovation from Democrats after being named Speaker of the House on the first day of Colorado’s 2023 session at the Colorado State Capitol on Monday, Jan. 9, 2023, in Denver, Colo. (Timothy Hurst/Denver Gazette)






The Colorado Attorney General’s office opposed Teva’s request for an injunction and sought to dismiss the lawsuit entirely. It argued that the U.S. Supreme Court has clarified that actions under the Takings Clause can only be brought when a “taking” occurs. For Teva, it would start on January 1 at the earliest, when pharmacists could request compensation or additional delivery.

Additionally, Assistant Attorney General Pawan Nelson argued that the affordability program is an appropriate use of the state’s “police” powers to regulate drugs.

“We have laws in this country where hospitals can’t turn people away from emergency rooms because they can’t pay,” he said. “That’s the same concept we’re talking about here. People shouldn’t be denied access to emergency services just because they can’t pay.”

“If a hotel in downtown Denver were to emit toxic fumes, the state could clearly use its police power to tell the hotel, ‘You have to close until it’s fixed,'” Lefkowitz responded. He argued that a supplemental or reimbursement program is more akin to telling a hotel it has to book 100 rooms per night for the homeless.

Domenico called Nelson’s first aid example an “interesting analogy.” But while Teva can’t yet seek an injunction in federal court and would have to file a lawsuit in state court for damages after the state actually begins taking its assets, Domenico worried about the continued claims Teva would have to make as long as pharmacists keep asking. redelivery or replacement requests.

“It’s a different matter when the state or municipality wants to build a road across your property. You kind of know what’s going on there,” he said. “It could be two weeks from now, they suddenly get 200 of these (requests) or they don’t get any for a month.”

In the end, Domenico seemed unsure whether he could intervene before the government effectively took Teva’s assets without compensation.

“There’s just something different about the takings clause than the Second Amendment and the First Amendment. Those cases involve a prohibition against doing something,” he said. In contrast, Teva is allowed to continue selling its automatic injectors.

“But when they do, they have to give up some of their assets,” he explained. “And there’s something different about that.”

The thing isTeva Pharmaceuticals USA, Inc. v. Weiser et al.

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Image Source : www.coloradopolitics.com

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