Maryland Bill Seeks to Stop Generic Drug Price Gouging

A Maryland bill would start investigations and impose fines to stop generic drug companies from increasing their prices exorbitantly. 

The bill (H.B. 631) would prohibit a manufacturer from engaging in “price gouging” in the sale of an “essential off-patent or generic drug.” Specifically, it would empower the Maryland attorney general to sue a generic manufacturer that institutes unjustified price increases. 

“The bill would grant the Attorney General considerable discretion in pursuing so-called and poorly defined ‘price gouging,’” Stephanie Trunk, a health-care attorney with Arent Fox LLP in Washington, told me. If the attorney general believes the price increase isn’t justified, he or she can pursue a case against the manufacturer for price gouging. The bill also would impose a civil penalty of up to $10,000 for each violation.

But the Association for Accessible Medicines (AAM), formerly the Generic Pharmaceutical Association, said in a position paper that the bill “ignores the real cause of increasing prescription drug costs” because it “only applies to generic drugs, not much expensive brand-name and specialty drugs that cost Maryland patients and tax-payers billions of dollars per year.”

The AAM said brand name and specialty drugs cost Maryland patients over $3.5 billion, while generics saved Maryland $3.7 billion in just one year alone. 

The bill’s standards on when a price increase is “unjustified” are vague, the AAM said. “Given the vague standards set forth in the bill, companies would perpetually be at risk of facing prosecution for taking actions that normally occur during the course of business within the competitive free market.”

The bill, introduced in January, has more than 80 sponsors, including Democrats and Republicans. The Maryland House of Delegates passed the bill on March 20. A date hasn’t been set yet for the Maryland Senate to vote on the bill.


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