We knew we were in for a fight when we sued the state, arguing that a drug transparency law was supposed to make records….transparent.
We expected the pharmaceutical companies to intervene and attempt to block the state from releasing the information. And we knew because of a federal trade secrets provision inserted into the bill, our case would be tougher to make.
We were, unfortunately, correct.
This week, District Court Judge Adriana Escobar ruled that the state could keep the records we were seeking confidential. It’s a not-unexpected setback, and we will be appealing to the state Supreme Court.
As you can see from the decision below, the judge disagreed with our claims that the state crafted regulations that were inimical to the law’s obvious intent:
The Department in its broad discretion to implement regulations to foster efficient enforcement of codified legislation developed NAC 439.730 740, respectively, to ensure the NPRA coincided with the DTSA protections. See Case 2:17-cv-02315 at Doc. 1, p. 20. Had the Department failed to carve out these procedural protections, the courts would become inundated with cases in which the compelled disclosing parties claim they did not have the opportunity to protect their trade secrets from mass disclosures.
Moreover, the confidentiality protections are not automatic. The Department notifies the entity with information implicated in the NPRA request and gives said entity 30 days to claim any confidentiality protections. The Department then analyzes the requested information through the DTSA confidentiality and trade-secret lenses to confirm whether said information should be protected. Only after this process does the Department conclude whether the information should be protected.
We also argued that the clear legislative intent was for the drug company records to be public, that it was designed for the public to know the relationship between cost and price. Let me repeat what I wrote when we filed the lawsuit last summer:
“The intent of the legislation, clearly expressed during the session, was to discover how pharmaceutical companies were pricing insulin in relation to its costs by requiring companies to disclose to the state certain data points associated with the manufacture and sale of the drugs. After much wrangling, including a resurrected measure after a gubernatorial veto, the law passed. But then during the regulatory process, where legislative intent is often left behind, a mechanism was inserted that allows the companies to invoke the federal trade secrets law to essentially undermine what the state did.
“To be clear, nobody — legislators, us, the public — wants to expose trade secrets. That’s a red herring. Again, the public interest is in how the drugs are priced relative to their costs. That is, are the (drug) companies…as some legislators believe and anecdotes suggest, gouging people (on certain drugs)?”
Escobar, though, disagreed that the reports we were seeking would not violate trade secrets:
…these reports derive independent economic value, actual or potential, from not being generally known to, or readily ascertainable by other people who can obtain economic value from its disclosure or use and is subject to reasonable efforts to maintain its secrecy. These efforts include significant limitations on who receives said information the Department and high-level employees privatizing the information that is shared, and submitting prompt requests to the Department to exclude said reports from disclosure based on their trade- secret qualities.
We are disappointed both in the outcome and in the state’s decision to align itself with the pharmaceutical companies instead of the public on this issue. But we are undaunted, and especially during a time when people need access to their medications more than ever, we think the public has a right to know how these drugs are being priced.