Just a day before a lawsuit by The Nevada Independent to obtain public records through the state’s drug transparency law was set for a hearing and both sides had filed briefs, District Court Judge Adriana Escobar has kicked the hearing date to November 19.
The Independent filed suit against the state’s Department of Health and Human Services in August after the state effectively denied two records requests seeking copies of reports submitted to the state by drug companies and pharmaceutical middlemen under the state’s bipartisan insulin pricing transparency law.
In particular, the law requires drug makers to hand over annual reports to the state detailing the precise reasoning behind price hikes for insulin and other essential diabetes drugs. Since it was passed in 2017, the law mandates that those individual annual reports be aggregated into a larger, anonymized report published by the state.
Those details include specifics on the cost of research, manufacturing and marketing of prescription insulin medication, as well as an explanation from some manufacturers on the reasoning behind the skyrocketing price of certain drugs.
Early on, the state argued that a federal law, the Defend Trade Secrets Act (DTSA), preempts the state law and makes that information confidential. Its position came in the face of stiff opposition from the pharmaceutical industry, which pushed hard against the bill during the 2017 session and which has sued once already to keep the state from publishing key details.
That suit was eventually dropped, but only after DHHS adopted internal policies allowing drug makers to mark those details as trade secrets. In ending legal action, industry lawyers — calling the bill “facially unconstitutional” — left the door open for another lawsuit.
In a brief for The Independent, attorney Matthew Rashbrook argues the DTSA was written with the intent not to pre-empt state trade secret laws, meaning drugmakers couldn’t use the law as a cause of action to take the state to federal courts.
“The DTSA does not provide anyone a cause of action against [the state], and even if it did, they would still be entitled to immunity from suit under the Eleventh Amendment,” Rashbrook wrote. “In short, the DTSA provides no shelter to [the state] for their unreasonable refusal to disclose the public records requested herein.”
The 11th Amendment, ratified in 1795, bars federal courts from hearing cases in which a state is sued by individuals from another state or country.
The brief goes on to argue that such records fall “undoubtedly” within the scope of state public records law, which in 2007 was amended by legislators to be “construed liberally” in favor of providing access to records. Later, in the 2011 case Reno Newspapers, Inc. v. Haley, the Nevada Supreme Court ruled that any government agency looking to shield records would have to prove concealment “clearly outweighs” public access — a standard, Rashbrook wrote, that is not met in this instance.
Attorney General Aaron Ford, meanwhile, has shifted away from the pre-emption argument, arguing in a motion to dismiss filed last week that the DTSA instead creates a “separate, independent layer of federal protection for trade secrets.”
He added that the transparency law “did not amend the [Nevada Public Records Act] to destroy all trade secret protection” under either federal or state laws, and that DHHS had acted properly in making secret “documents declared by law to be confidential.”