California State Board of Pharmacy Wins Ninth Circuit Appeal: Outsourcing Facilities Subject to State Regulation

On June 17, 2020, the United States Court of Appeals for the Ninth Circuit issued its ruling in the case Fusion IV Pharmaceuticals, Inc. v. Anne Sodergren and California State Board of Pharmacy; et al, affirming a lower court decision that California’s state law regulating outsourcing facilities is not preempted by federal law. Partner Libby Baney and associate Jonathan Keller co-authored an article providing context and analysis of the case for The National Association of Board of Pharmacy’s Innovations magazine.

Having initially lost at the district court, the plaintiffs appealed the court’s decision to the Ninth Circuit. The Ninth Circuit affirmed the district court’s decision, agreeing that California’s regulatory oversight of outsourcing facilities is not preempted by the Drug Quality and Security Act, nor do such state regulations violate the Commerce Clause’s protections against state laws imposing unreasonable burdens on federal law.

Along with outlining the case, Baney and Keller look to the future of state vs. federal regulation of outsourcing facilities, questioning how it will affect outsourcing facilities outside of California’s jurisdiction and other state boards of pharmacy.

“One thing is clear – state boards of pharmacy now have a federal appellate court opinion ruling that outsourcing facilities are subject to state oversight and regulation,” they say.