WASHINGTON — The U.S. Court of Appeals for the Eighth Circuit has unanimously upheld a lower court’s decision blocking enforcement of a Minnesota law that sought to regulate the pricing of generic drugs. This marks a significant legal victory for the Association for Accessible Medicines (AAM).
The appellate ruling affirms a December 2023 preliminary injunction issued by a Minnesota district court, concluding that the 2023 state law likely violates the dormant Commerce Clause by attempting to control drug prices beyond Minnesota’s borders.
“AAM is very pleased that the Eighth Circuit, like the district court in Minnesota and every other court that has confronted this question, has ruled that states may not control prices charged outside their borders,” said John Murphy III, President and CEO of AAM. “AAM and its members work every day to lower drug prices by making available lower-cost generic and biosimilar alternatives, and we look forward to continuing to work with states on policies that expedite patient access to these critical medicines.”
The Minnesota law was enacted to address rising drug costs but applied only to generics, despite a state advisory task force noting that “the most egregious examples are found in the branded and specialty drug markets.” AAM argued the law unfairly burdened generic manufacturers. Minnesotans saved $6.2 billion from generic and biosimilar medicines in 2023, according to AAM’s 2024 Annual Savings Report.
In its decision, the Eighth Circuit warned that the law could “backfire” by prompting manufacturers to exit the market. The ruling said that, “under the Act, Minnesota regulates the price of out-of-state transactions, insists that out-of-state manufacturers sell their drugs to wholesalers for a certain price, and ties the price of in-state products—prescription drugs—to the price that out-of-state manufacturers charge their wholesalers,” and that the Minnesota law, “could also backfire and, for example, force generic manufacturers to pull out of the market.”
