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Pharmaceutical Research & Manufacturers of America v. County of Alameda

United States District Court, N.D. California

August 28, 2013

PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA, et al., Plaintiffs,
v.
COUNTY OF ALAMEDA, et al., Defendant

For Pharmaceutical Research and Manufacturers of America, Generic Pharmaceutical Association, Biotechnology Industry Organization, Plaintiffs: Christian G. Vergonis, LEAD ATTORNEY, Michael A. Carvin, Richard Macdonald Re, Jones Day, Washington, DC; Craig Ellsworth Stewart, Jason S. McDonell, LEAD ATTORNEYS, Lin W. Kahn, Jones Day, San Francisco, CA.

For Alameda County, California, Alameda County Department of Environmental Health, Defendants: Arthur Joel Shartsis, LEAD ATTORNEY, Mary Jo Shartsis, Richard F. Munzinger, Shartsis Friese LLP, San Francisco, CA.

OPINION

Page 1340

ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANTS' CROSS-MOTION

RICHARD SEEBORG, UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

The County of Alameda has adopted what has been described as a " first in the nation" approach to addressing concerns arising from the disposal of unused prescription drugs. Its " Safe Drug Disposal Ordinance" (the " Ordinance" ), scheduled to go into effect in November of this year, requires producers of prescription drugs to fund or operate " take-back" programs in the county, if any of their drugs are sold there. The ordinance is crafted to place the entire cost of such programs on the producers; retail pharmacies are exempt, and sellers are prohibited from passing the expense directly to Alameda County consumers by adding a fee at the point of sale. Plaintiffs are industry associations whose members produce prescription drugs sold in the county, on whom the costs of complying with the Ordinance will fall. They bring this suit to have the ordinance declared an unconstitutional burden on interstate commerce, under the so-called " dormant Commerce Clause."

Having stipulated that the material facts are undisputed, the parties now bring cross-motions for summary judgment. Because the Ordinance does not discriminate against out-of-state actors in favor of local persons or entities, and does not otherwise impermissibly burden interstate commerce, plaintiffs' motion will be denied, and defendants' motion granted.

II. BACKGROUND

Demonstrating commendable cooperation and professionalism directed at resolving this litigation in an efficient manner, the parties stipulated to a list of 38 points that are not in dispute for purposes of these cross-motions. In slightly condensed form, the following are the parties' stipulations:

1. The Ordinance, Alameda Health and Safety Code Sections 6.53.010, et seq., requires

Page 1341

that manufacturers of prescription drugs who sell, offer for sale, or distribute prescription drugs in Alameda County (" Producers," as defined in the Ordinance) operate and finance a product stewardship plan that provides for the collection, transportation, and disposal of certain unwanted prescription drugs.

2. The Ordinance declares that in Alameda County, the public -- particularly children and the elderly -- are at significant and unnecessary risk of poisoning due to improper or careless disposal of prescription drugs and the illegal re-sale of prescription drugs; that the groundwater and drinking water are being contaminated by unwanted, leftover, or expired prescription drugs passing through wastewater and treatment centers; and that there is no mandatory statewide drug stewardship program in California for the safe collection of unwanted drugs, and drug manufacturers and producers have not offered any support for a permanent collection program to date.

3. Pursuant to the Ordinance, Producers are required to operate, individually or jointly with other Producers, a Department [of Environmental Health]-approved product stewardship program or enter into an agreement with a stewardship organization to operate, on each Producer's behalf, a Department-approved product stewardship program. In order to ensure that costs are fairly allocated, if more than one Producer is involved in a proposed product stewardship program, the product stewardship plan must include a fair and reasonable manner for allocating the costs of the program among the participants, such that the portion of costs paid by each Producer is reasonably related to the amount of prescription drugs that Producer sells in Alameda County.

4. The Ordinance, on its face, does not impose different requirements on Producers within Alameda County and Producers outside of Alameda County.

5. The Ordinance, on its face, does not impose different requirements on Producers within California and Producers outside of California.

6. The Ordinance, on its face, applies both to interstate Producers and intrastate Producers.

7. The Ordinance requires Producers that market and sell in Alameda County the prescription drugs identified in the Ordinance be responsible for the disposal of those products.

8. Any person, manufacturer, or distributor that does not sell, offer for sale, or distribute prescription drugs in Alameda County is not required to undertake any action under the Ordinance.

9. Nothing in the Ordinance requires that Producers implement stewardship plans in any location or jurisdiction outside of Alameda County. If Producers are required to implement stewardship programs in any other jurisdiction, nothing in the Ordinance requires that the stewardship program implemented in other jurisdictions be the same as the program implemented in Alameda County pursuant to the Ordinance. Similarly, nothing in the Ordinance prohibits Producers from proposing and implementing a program in Alameda County that they are already using or contemplating using in any other jurisdiction.

10. Plaintiffs are non-profit trade organizations representing the manufacturers and distributors of pharmaceutical products. Plaintiff Pharmaceutical Research and Manufacturers of America (" PhRMA" ) represents companies that produce brand-name drugs. Plaintiff Generic Pharmaceutical Association (" GPhA" ) represents ...


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