*

Teva argues law requiring pharmacies to sell injectors at

$60,

amounts to illegal taking

*

Court rules Teva's claim overcomes Colorado's sovereign

immunity

*

Challenge will continue

By Diana Novak Jones

CHICAGO, Sept 5 (Reuters) - Colorado must face Teva

Pharmaceutical Industries' lawsuit challenging a state law

requiring it to provide free generic EpiPens to pharmacies, a

federal appeals court said Friday.

A unanimous three-judge panel of the Denver-based 10th

U.S. Circuit Court of Appeals upheld a lower court's ruling

rejecting Colorado's motion to dismiss the generic drugmaker's

lawsuit. In an opinion authored by U.S. Circuit Judge Bobby

Baldock, the panel agreed that Teva's claim that Colorado is

violating federal law is enough to overcome the state's general

protection from lawsuits provided by the U.S. Constitution.

Representatives for Teva did not immediately respond to a

request for comment on the ruling.

A spokesperson for Colorado Attorney General Phil Weiser

declined to comment.

Spurred by dramatic increases in the cost of Viatris' ( VTRS )

EpiPens in recent years, Colorado joined a number of states in

passing laws seeking to cap the cost of branded and generic

versions of the auto-injectors, which are handheld devices that

treat life-threatening severe allergic reactions by

automatically injecting a dose of the drug epinephrine.

Colorado's law drew multiple lawsuits from pharmaceutical

companies, who said it unconstitutionally took their property by

forcing them to reimburse sellers or give away their product.

Tel Aviv-based Teva sued Colorado in 2023, just before

its law went into effect. It requires all pharmacies to sell the

auto-injectors at a cost of no more than $60 for a two-pack.

Teva makes a generic version of the drug, which it normally

sells for around $300 for a two-pack, roughly half the wholesale

cost of the branded version, according to court records.

The law also requires pharmacies to provide the injectors

with the $60 price cap to people whose insurance does not cover

them, and manufacturers in turn to provide the pharmacies with a

free replacement or reimbursement for each injector sold under

that requirement. If manufacturers don't comply, they risk

facing fines.

The company argued that the law was an illegal taking of its

property under the 5th Amendment of the U.S. Constitution.

Colorado moved to dismiss the lawsuit, arguing that the

state has immunity from such claims under the U.S.

Constitution's Eleventh Amendment, but the trial court sided

with Teva.

The 10th Circuit panel agreed with the lower court's

reasoning that an exception to Colorado's sovereign immunity

applies in the case because Teva is alleging Colorado has

committed an ongoing violation of federal law and isn't seeking

monetary damages. Teva has asked for an injunction barring

Colorado from enforcing the law's provision that it reimburse or

resupply pharmacies for the auto-injectors they dispense.

The panel sent the lawsuit back to the lower court, where it

can move forward. The ruling will likely restart a similar

lawsuit challenging the law brought by Amneal Pharmaceuticals ( AMRX ),

which had been on hold until the 10th Circuit issued its

opinion, court records show.

The case is Teva v. Weiser, case number 24-1035 in the 10th

U.S. Circuit Court of Appeals.

For Teva: Cole Carter and Jay Lefkowitz of Kirkland & Ellis

For Colorado: Pawan Nelson and Jennifer Johnson of the

Colorado Department of Law