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Big Pharma Sues to Block Minnesota Insulin Program

A Minnesota law creating an insulin safety net for impoverished diabetics went into effect Wednesday, but it was met with a surprise legal challenge from major manufacturers of the lifesaving hormone.

ST. PAUL, Minn. (CN) — A Minnesota law creating an insulin safety net for impoverished diabetics went into effect Wednesday, but it was met with a surprise legal challenge from major manufacturers of the lifesaving hormone.

The Alec Smith Insulin Affordability Act — named after a 26-year-old Minneapolis man who died in 2017 after being unable to afford the $1,300 monthly price tag for insulin, treatment and testing — allows qualified insulin users to buy a 30-day supply for $35 or less.

The law, pushed largely by Democrats but with Republican co-sponsors in both legislative chambers, was one of very few passed by Minnesota’s divided government in 2019.

Governor Tim Walz, a Democrat, had harsh words for the pharmaceutical industry at a press conference Wednesday afternoon. Walz and legislators said they had passed a weakened version of the bill with assurances from Republicans that it would not be a target of lawsuits from the industry.

That didn’t stop the Pharmaceutical Research and Manufacturers of America, or PhRMA, a Washington lobbying nonprofit representing large pharmaceutical companies, from filing a complaint Tuesday evening in federal court challenging the law.

The group claims the Alec Smith Act violates the takings clause of the U.S. Constitution by requiring manufacturers who make over $2 million on insulin sales annually and sell it at prices over $8 per milliliter in Minnesota to provide insulin to pharmacies for the $35 monthly supplies.

“We’ve advocated for real policy reforms that states like Minnesota can pursue to make the system work better for patients,” PhRMA Executive Vice President James Stansel said in a statement. “Unfortunately, this law is unconstitutional, overlooks common sense solutions to help patients afford their insulin and, despite its claims, still allows for patients to be charged at the pharmacy for the insulin that manufacturers are required to provide for free.”

Spokesman Nick McGee emphasized that PhRMA would not be seeking an emergency ruling to block the law from going into effect, but would be seeking its eventual overturn because of the constitutional claims.

Supporters on both sides of the aisle decried the lawsuit Wednesday, with Minnesota Senate Majority Leader Paul Gazelka, a Republican, calling it “poorly timed” in light of the time spent working on a compromised bill.

“Senate Republicans remain committed to providing emergency insulin for those in crisis,” he said in a statement.

“This isn’t just about bad timing, this is about bad faith,” Walz said at the press conference, where several speakers said the lawsuit would not be able to stop advocates from celebrating their success.

“They have my phone number. I never heard a word. I heard no inkling they were going to do this, I heard no chatter out there at all,” the Democratic governor continued. “I gotta be honest, they did something that I didn’t think was possible-- they’re more hated than Covid-19.”

State Senator Matt Little and Representative Michael Howard, Democrats who co-sponsored the bill in their respective legislative bodies, confirmed that they’d received the guarantee from their Republican co-sponsors that Big Pharma wouldn’t sue.

Questions about where that information came from, Little said, should be directed to GOP Senators Scott Jensen and Eric Pratt.

Jensen, reached Wednesday evening, said he was as surprised as Little.

"I'm very disappointed that they filed the lawsuit in the 11th hour. I think we had great conversations, and stakeholders indicated that they much preferred the Senate version versus the House version,” he said. “We all sat at the same tables and had the same kinds of meetings… That doesn't mean [the industry] give up or forfeit their right to challenge it, and I guess they changed their minds."

"I had a couple of conversations today from stakeholders that I think-- they're feeling sort of sheepish,” Jensen added. “There are many people who were involved with crafting the bill, and I think 90% of them thought the bill was going to stand just the way it was, and somewhere, there was a decision made sometime in the last few days.” 

He speculated that the suit could have been brought to ensure that other states couldn’t point to an unchallenged bill in Minnesota when defending similar laws.

Diabetes activists at the conference, including Nicole Smith-Holt and James Holt, Smith’s parents, were no more forgiving toward PhRMA. Alexis Stanley, a 21-year-old college student with Type 1 diabetes, came to the podium wearing a shirt that read “My Life > Their Profit.”

“These companies claim to have solutions to our problems already in place, but if that was the case, one in four diabetics would not be rationing their insulin,” she said.

Insulin, which is estimated to cost between $2 and $7 per vial to produce, has seen skyrocketing prices around the country in recent years. Price-fixing schemes have left diabetics paying hundreds of dollars for the nearly century-old drug, making insulin a major target for health care reformers.

“This is a small bill, just to get insulin into the hands of people who need it. This bill doesn’t lower the cost of insulin, and that’s a problem,” Little said. “You shouldn’t need emergency insulin. You should just be able to get your insulin.”

Republican Rod Hamilton, who supported the bill in the Minnesota House of Representatives, said he would like to see the pharmaceutical industry more involved in fixing the insulin issue.

“The pharmaceutical companies need to be part of the solution as well,” he said in a phone interview. “I will be the last person that will stand up to defend Big Pharma, I’ve had my own personal run-ins with them, with my health issues as well… but they must be part of the solution, they have some skin in the game here.”

Little was less conciliatory.

“I want to end just speaking directly to PhRMA, the organization that has filed a lawsuit,” he concluded at the press conference. “Spend more money, hire more lobbyists, hire more lawyers, because you are in a fight against Nicole, James and Alexis, and I do not like your odds.”

Categories:Government, Health, Law, Regional

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