On June 12, the U.S. Court of Appeals for the Eighth Circuit upheld a federal district court's order that preliminarily enjoined enforcement of Minnesota's law controlling price increases for generic drugs, Ass'n for Accessible Medicines v. Ellison, No. 24-1019 (June 12, 2025).
The Minnesota statute prohibits generic manufacturers from imposing or causing to be imposed "an excessive price increase" on a drug delivered to any consumer in the state. The law regulates only generic manufacturers, not wholesale distributors or pharmacies. The Eighth Circuit concluded that the Minnesota law controlled the prices at which out-of-state manufacturers sold drugs to out-of-state wholesalers, and thus has a "specific impermissible extraterritorial effect of controlling prices outside Minnesota," violating the Commerce Clause of the U.S. Constitution. This is the same conclusion the Fourth Circuit came to in 2018 in striking down a virtually identical Maryland law, in Ass'n for Accessible Meds. v. Frosh, 887 F. 3d 664. In the intervening years, the Supreme Court had held that there is not an "almost per se rule forbidding enforcement of state laws that have the practical effect of controlling commerce outside the State," Nat'l Pork Producers Council v. Ross, 598 US 356, 371 (2023). But the Eighth Circuit concluded that Pork Producers did not prevent it from enjoining the Minnesota law because it has a "specific" extraterritorial effect.
The Minnesota case raises different issues than litigation challenging state upper payment limits—imposed by state prescription drug affordability boards (PDABs)—because those limits attempt to directly regulate prices paid by purchasers within a state. A challenge to the Colorado upper payment limit law is current being briefed before the U.S. Court of Appeals for the Federal Circuit. Among other claims, the plaintiffs argue that the Colorado law is preempted by federal patent law.
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