Federal Appeals Court Upholds Oregon Drug Price Transparency Law

The Ninth Circuit Court of Appeals reinstated Oregon's Prescription Drug Price Transparency Act of 2018, allowing the state to require pharmaceutical companies to disclose detailed information about drug price increases, including explanations for hikes on medications costing more than $100 per month. The law aims to reduce informational asymmetries in the pharmaceutical market and assist in creating more informed commercial transactions, a rationale supported by 21 state attorneys general in their amicus brief. The Pharmaceutical Research and Manufacturers of America (PhRMA) challenged the law, arguing it violated free speech by compelling companies to disclose sensitive trade secrets and effectively forced them to admit blame for rising drug costs. However, the appeals court majority ruled that the reporting requirements constitute commercial speech subject to regulation and found no constitutional violation, overturning a 2024 district court decision that had blocked the law. While Circuit Judge Carlos Bea dissented, supporting PhRMA's First Amendment claims, the majority opinion emphasized the state's substantial interest in transparency and market efficiency. The ruling thus allows Oregon and potentially other states with similar laws to enforce greater transparency measures on pharmaceutical pricing.