Pharmaceutical Research and Manufacturers of America v. Williams

Background

Pharmaceutical Research and Manufacturers of America (PhRMA) is a nonprofit corporation representing pharmaceutical companies. Its members include Eli Lilly and Company, Novo Nordisk Inc., and Sanofi, which the complaint alleged collectively manufacture most of the insulin sold in Minnesota and the United States. The defendants were members of the Minnesota Board of Pharmacy, sued only in their official capacities to enforce the Alec Smith Insulin Affordability Act.

The Act created two insulin safety-net programs. The Continuing Safety Net Program requires covered manufacturers to provide insulin at no charge to eligible individuals, subject to specified eligibility requirements. The Urgent Need Program requires manufacturers to provide a 30-day supply of insulin without charge to eligible individuals who have less than a seven-day supply and need insulin to avoid likely significant health consequences. The Act includes exemptions for certain manufacturers and products, but the complaint alleged that neither applied to PhRMA’s members.

PhRMA alleged that the programs would impose significant costs by requiring its members to give away insulin and administer the programs. It asserted that the Act violated the Fifth Amendment’s Takings Clause because it required manufacturers to provide insulin without compensation. PhRMA also alleged that one exemption could violate the dormant Commerce Clause if interpreted as allowing manufacturers to avoid the alleged taking only by lowering the national wholesale acquisition cost of their products. PhRMA sought declaratory and injunctive relief, not compensation.

Defendants’ Motion to Dismiss

The defendants moved to dismiss for lack of subject-matter jurisdiction and failure to state a claim. The court focused on standing, which requires a plaintiff to show an injury, a connection between the injury and the challenged conduct, and a likelihood that the requested relief would remedy the injury.

The court held that PhRMA lacked the required redressability for its takings claim. Relying on the Supreme Court’s decision in Knick v. Township of Scott, the court explained that the usual remedy for a taking is just compensation, and that injunctive relief is unavailable when an adequate compensation remedy exists. Minnesota provides such a remedy through inverse-condemnation actions in state court.

The court rejected PhRMA’s arguments that Minnesota’s remedy was inadequate because it could not address future or continuing takings. It explained that a future taking, which has not yet occurred, does not create a takings claim, and it was not persuaded that requiring multiple actions would make Minnesota’s procedures inadequate. The court also rejected PhRMA’s argument that declaratory relief remained available, reasoning that a declaration that the Act was an unconstitutional taking would function like an injunction barring enforcement.

The court therefore dismissed the takings claim because PhRMA could not show that its requested relief would likely remedy its alleged injury. The court also dismissed the dormant Commerce Clause claim because PhRMA did not dispute that it was derivative of the takings claim. The court additionally noted that it should avoid deciding hypothetical constitutional questions and should, when reasonably possible, interpret statutes to avoid constitutional doubts.

Other Motions and Disposition

PhRMA conditionally sought leave under Federal Rule of Civil Procedure 15(d) to file a supplemental complaint addressing later events if the court dismissed the complaint on ripeness or injury-in-fact grounds. The court denied the motion as futile because the proposed amendments would not overcome the separate deficiencies supporting dismissal.

PhRMA also moved for summary judgment. Because the court granted the defendants’ motion to dismiss, it denied PhRMA’s summary-judgment motion as moot.

The court’s order granted the motion to dismiss, 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.