Summary
The United States District Court for the District of Connecticut denied Healthcare Distribution Alliance’s motion for a preliminary injunction seeking to prevent Connecticut officials from enforcing prescription-drug price-cap provisions in Public Act No. 25-168. The court held that the Act did not clearly discriminate against interstate commerce, did not impermissibly burden interstate commerce under the Pike balancing test, and did not have an unconstitutional extraterritorial effect. The court also concluded that HDA was unlikely to succeed on its Due Process Clause claim.
Topics
Practice areas
Questions Presented
- Whether HDA was likely to succeed on its claim that Public Act No. 25-168 violates the dormant Commerce Clause by discriminating against interstate commerce.
- Whether HDA was likely to succeed on its claim that the Act imposes an undue burden on interstate commerce under the Pike balancing framework.
- Whether the Act has an impermissible extraterritorial effect by regulating or controlling commerce occurring outside Connecticut.
- Whether HDA was likely to succeed on its Fourteenth Amendment Due Process Clause claim that Connecticut was attempting to regulate activities wholly beyond its borders.
- Whether HDA satisfied the likelihood-of-success requirement for a preliminary injunction.
Holdings
- HDA was unlikely to succeed in showing that Public Act No. 25-168 clearly discriminates against interstate commerce because the Act applies equally to covered distributors regardless of whether they are located or headquartered inside or outside Connecticut.
- HDA was unlikely to succeed in showing that the Act imposes an unconstitutional incidental burden on interstate commerce under Pike.
- HDA was unlikely to succeed in showing that the Act has the specific impermissible extraterritorial effect required for a dormant Commerce Clause violation.
- HDA did not show a likelihood of success on its Due Process Clause claim because defendants' clarification limited enforcement to covered sales in which title passes in Connecticut.
- The motion for a preliminary injunction was denied because HDA failed to make the required clear showing that it was likely to succeed on the merits.
Key quotations
“Because HDA has not shown that the Act is protectionist or discriminatory, the court finds that it is unlikely to succeed on the merits of its dormant Commerce Clause claim.” (at discussion of dormant Commerce Clause)
“Accordingly, the court “need not reach the remaining preliminary injunction factors” before denying its Motion for a Preliminary Injunction.” (at conclusion)
Factual background
HDA is a national trade association representing wholesale distributors of prescription drugs, and its members are located outside Connecticut. Connecticut enacted Public Act No. 25-168, which beginning January 1, 2026 prohibits covered manufacturers and distributors from selling certain prescription drugs in Connecticut above a reference price based on the drug's January 1, 2025 wholesale acquisition cost adjusted for inflation. HDA members sell drugs free on board destination, so title passes when drugs are delivered to Connecticut retailers. Defendants clarified that the Act would apply only when title to the drugs is taken in Connecticut, while HDA argued that compliance would require major changes to its business model and violate the dormant Commerce Clause.
Procedural history
Healthcare Distribution Alliance filed a federal action on behalf of out-of-state wholesale prescription-drug distributors against the Connecticut Commissioner of Revenue Services and Attorney General. It moved for a preliminary injunction, alleging that Sections 345 through 347 of Public Act No. 25-168 violate the dormant Commerce Clause and the Fourteenth Amendment Due Process Clause. After a December 9, 2025 hearing, defendants clarified that they would enforce the Act only against covered sales in which title passes in Connecticut. The court denied the preliminary injunction because HDA had not shown a likelihood of success on the merits and directed HDA to address the clarification through an amended complaint or notice.