Teva Takes Colorado To Court Over Auto-Injector Access Program

Generics giant Teva Pharmaceuticals has urged a Colorado District Court to scrap a recently enacted law that will implement an epinephrine auto-injector “affordability program” in the state. House Bill 23-1002 states that whenever an eligible uninsured patient in the state acquires an epinephrine auto-injector from a Colorado pharmacy, the manufacturer must send the pharmacy a free replacement or reimburse it for the full price it paid for the auto-injector.

This reimburse-or-resupply requirement represents an unconstitutional “per se physical taking” of Teva’s personal property in violation of the Takings Clause of the Fifth Amendment, the company said. The Fifth Amendment provides that “private property [shall not] be taken for public use, without just compensation.”

Teva has sought a preliminary injunction against commissioner of the Colorado Division of Insurance Michael Conway and attorney general Philip Weiser, barring the defendants from enforcing the requirement. It has also sought a declaratory judgement that the requirement violates the Takings Clause of the Fifth Amendment.

If the affordability program is permitted to go into effect, as it currently scheduled to do on 1 January 2024, Teva will be required to provide Colorado pharmacies with free epinephrine auto-injectors, or else face “a fine of tens of thousands of dollars for each month of noncompliance”.

HB 23-1002 also states that those manufacturers that fail to comply engage in “deceptive trade practice” under the Colorado Consumer Protection Act, a law which can be enforced by both private plaintiffs as well as the attorney general and result in treble damages.

“The harm to Teva as a direct result of the actions and threatened actions of defendants is sufficiently real and imminent to warrant the issuance of declaratory judgment and prospective injunctive relief,” the company said. “This court’s immediate review of the Act’s constitutionality is necessary to prevent an imminent infringement of Teva’s fundamental constitutional rights under the Fifth Amendment.”

Furthermore, the amount Teva would have to pay the pharmacy for the auto-injector will almost always be more than what it would make selling the product to a wholesaler, the company has said.

“Because the price pharmacies pay wholesalers for auto-injectors will almost always be higher than the price that Teva can charge those same wholesalers, the choice between replacement and reimbursement is really no choice at all. Sending free auto-injectors will be cheaper for Teva than paying pharmacies more than Teva could earn if it kept the auto-injectors and sold them,” the company said in its complaint.

Teva does not sell auto-injectors directly to any purchasers in Colorado. Rather, it sells its auto-injectors to national wholesalers and retail pharmacy distributors, which then re-sell those auto-injectors downstream to pharmacies in Colorado.

These are sold based on the drug’s wholesale acquisition cost, less certain discounts and price concessions. In 2023 it sold its 0.3mg and 0.15mg epinephrine auto-injectors at a WAC of $300 per two-pack, approximately half that of branded versions.

HB 23-1002

HB 23-1002, which was signed into law by governor Jared Polis on 7 June 2023, states that while “epinephrine auto-injectors are essential because they are the easiest and most efficient way to potentially save the life of an individual exhibiting symptoms of or experiencing anaphylactic shock… many individuals are unable to afford an epinephrine auto-injector because they cannot pay the copayment amount required under their insurance plan or, if they are uninsured, the cost of an epinephrine auto-injector.”

In order to address the affordability issue, the bill states that for health plans issued or renewed on or after 1 January 2024, a carrier which provides coverage for prescription epinephrine auto-injectors shall cap the total amount that a covered person is required to pay at $60 for a two-pack of epinephrine auto-injectors.

The bill also established an affordability program. All Colorado citizens who have a valid prescription for epinephrine auto-injectors and do not have private health insurance that covers them are eligible. These individuals are then able to obtain a two-pack of auto-injectors for no more than $60. There are no limits to the number of auto-injectors an individual can obtain under the program.

The Colorado pharmacy can either keep the $60 payment for the auto-injectors or request full reimbursement or free replacements from the manufacturer, which must be supplied within 30 days of reimbursement application.