In 2023, the Colorado Legislature passed a law aimed at making epinephrine auto-injectors, a medication used to treat severe allergic reactions or anaphylaxis, more affordable. The legislation caps the copay at $60 for two injectors for people with insurance, and it also extends the cap to $60 for people who either don’t have insurance or whose insurance doesn’t cover the injectors.
But there’s one provision of the law that’s drawn a lawsuit from a generic manufacturer of the injectors, Amneal Pharmaceuticals.
Under the law, pharmacies can submit a claim to the manufacturers for reimbursement and replacement of the injectors disbursed through the program.
Amneal is alleging that this provision of the law amounts to an unconstitutional “per se physical taking” of Amneal’s property, which it argues is in violation of the Fifth Amendment.
The law also institutes a penalty for non-compliance and is subject to a $10,000 fine for each month it’s out of compliance, with a possibility of treble damages on top of that.
Amneal is seeking a permanent injunction barring the state of Colorado from enforcing the reimbursement or resupply requirement of the law, along with a declaratory judgment that the provision violates the takings clause.
Amneal is not challenging the entirety of the law. It doesn’t argue that the copayment cap is unconstitutional, and the complaint says that provision is within Colorado’s regulatory authority.
“What Colorado cannot do is force manufacturers like Amneal to bear the entire cost of the program by requiring them to surrender their property without any compensation,” the complaint said.
As of Sept. 12, Amneal claims that it has received requests for reimbursement or resupply from 52 Colorado pharmacies, totaling 204 auto-injectors.
The suit is against Colorado Attorney General Phil Weiser and the board members of the Colorado State Board of Pharmacy.
Amneal cites two U.S. Supreme Court cases to support its complaint, Cedar Point Nursery v. Hassid and Horne v. Department of Agriculture.
In Cedar Point Nursery, a California regulation allowed labor organizations the “right to take access” to an agricultural employer’s property for unionization purposes. In that case, organizers from United Farmer Workers sought access to the property of two California growers.
The growers alleged that the access regulation appropriated an easement without compensation for the organizers to enter their property and was an unconstitutional per se physical taking. The nation’s high court agreed with their argument, and held that California’s access regulation in that case constituted a per se physical taking.
Horne, another case dealing with agriculture in California, was directed at the U.S. Department of Agriculture’s California Raisin Marketing Order, where a percentage of a crop had to be set aside in certain years for the government free of charge, a reserve requirement. The Horne family refused to comply on the grounds that the requirement was an unconstitutional taking of their property for public use without just compensation, according to the opinion.
The nation’s high court held in that case that “The Fifth Amendment requires that the Government pay just compensation when it takes personal property, just as when it takes real property.”
At the time of publication, no response had been filed to the complaint. The Colorado Attorney General’s office declined to comment on the case. Amneal did not respond to Law Week’s request for comment.