The Ninth Circuit Court of Appeals has ruled that a lawsuit can proceed against a Portland company in a case centered on the high price of drugs in the U.S.
The years-long case pits a New York company, PharmacyChecker.com, which operates a website that links to online pharmacies and shows prices for consumers seeking cheaper prescriptions, against Portland-based LegitScript, a prominent research firm established to monitor online prescription sales. PharmacyChecker initially sued LegitScript and other companies in New York in 2019, alleging they had conspired to stifle competition and keep drug costs high, a violation of antitrust laws.
In 2021, PharmacyChecker’s complaint against LegitScript was peeled off that case and transferred to Portland. The following year, U.S. District Judge Michael Simon in Portland ruled against LegitScript’s call to dismiss the case. In 2024, he asked the Ninth Circuit Court of Appeals to weigh in.
On Friday, a three-judge panel of the Ninth Circuit concurred with Simon, a move that will let the Portland lawsuit move forward. The case centers on efforts to give consumers access to cheaper drugs from Canada and other countries against moves by regulators and the pharmaceutical industry to curtail online foreign drug sales.
The high price of drugs has had a big impact on consumers. A 2020 study estimated that more than 1 million Medicare patients would die by 2030 because they couldn’t afford their prescriptions. Meanwhile, Big Pharma revenues have continued to soar, reaching more than $600 billion in 2024 and expected to grow more than 5% a year into 2030, according to a San Francisco-based research company.
With U.S. drug prices nearly three times higher than those sold in other countries, according to a 2024 report, many Americans have turned to Canadian and other pharmacies to buy their prescriptions.
But regulators and law enforcement say medications sold online can hurt consumers by potentially supplying them with wrong doses and counterfeit medications while fostering organized crime.
LegitScript was formed in 2007 by a former Multnomah County prosecutor in an effort to protect consumers from unsafe drugs, according to a profile in The Oregonian/OregonLive. Under federal law, only drugs approved by the Food and Drug Administration can be sold in the U.S., though law enforcement has rarely pursued cases against online pharmacies and sales.
A lawyer for LegitScript, Richard Sybert, declined to comment Tuesday on the Ninth Circuit decision. He referred The Lund Report to the company.
A lawyer for PharmacyChecker did not immediately comment either, and referred The Lund Report to the company. A spokesperson, Lucia Mueller, did not discuss the Ninth Circuit decision, saying only in a statement that “PharmacyChecker looks forward to continuing its fight for competition and transparency in prescription drug pricing.”
Question of illegal activities
In its call for the Portland case to be dismissed, LegitScript alleged that PharmacyChecker did not have the right to file an antitrust lawsuit because it is engaged in illegal activities. In 2023, the U.S. District Court for the Southern District of New York concurred with that position in the 2019 antitrust lawsuit initially brought by PharmacyChecker against LegitScript, the National Association of Boards of Pharmacy and the industry-based Alliance for Safe Online Pharmacies. The case hinges on PharmacyChecker’s accusations that the companies were engaged in anticompetitive behavior and ran a coordinated campaign to stifle competition and artificially inflate prescription drug costs.
Simon’s request last year for a Ninth Circuit opinion coincided with a move by PharmacyChecker to obtain internal documents from LegitScript related to its relationships with regulators and the industry. It also followed efforts by lawmakers in Oregon and other states to import drugs from Canada to bring down prescription drug costs. Florida even won federal approval for its plan, an idea backed by President Donald Trump.
In recent years, Americans have turned to online pharmacies to obtain costly medications. PharmacyChecker, now 20 years old, was formed to help consumers identify online pharmacies that sell “genuine, safe and affordable prescription medications,” according to Mueller, the company’s spokesperson. The company offers an accreditation to online pharmacies that pay an online verification fee.
Simon said in his opinion last year that nearly 60% of PharmacyChecker’s revenue was linked to foreign pharmacies.
In the Ninth Circuit opinion, the panel noted that it is illegal “in most circumstances” for consumers to bring drugs into the U.S. for their own use because those medications were often not approved by the FDA for sale in the U.S. But it also said that PharmacyChecker is not a pharmacy and does not “buy, sell, distribute, dispense or process orders for any drugs.”
“Rather it accredits online pharmacies across the globe for their safety standards and it compares the prices of the drugs offered by those pharmacies for its website users from around the world,” it said.
Mueller, PharmacyChecker’s spokesperson, said the company has been up against Big Pharma and an industry drive to “misinform the public about online pharmacies, importation, and drug prices.”
PharmacyChecker alleges that LegitScript, state regulators and pharmaceutical companies have tried to scare consumers away from using its services and of putting PharmacyChecker on a “blacklist” to ban it off search engines operated by Google and Microsoft.
LegitScript has sold research to both companies.
