Maryland’s new “price gouging” law is set to take effect in October of this year. However, some groups are not happy and want it voided. On Thursday, a group representing several manufacturers of generic prescription drugs filed a federal lawsuit against the state in hopes of stopping the law. The Association for Accessible Medicines referred to the measure as “an unconstitutional overreach”.
AAM’s CEO Chip Davis complains that the law gives more favor to government regulation, while eroding generic competition. “Rather than allow the vibrant competition in the generic drug marketplace to continue working for patients, Maryland would become the first state to reject generic competition in favor of more government regulation.”
The law would give the state’s attorney general the ability to bring civil actions against manufacturers of off-patent and generic drugs with significant price increases. The law would give the attorney general the power to request additional information from the corporate that initiated the price increase. In return, that information would help the attorney general determine whether or not price gouging had occurred.
Manufacturers found guilty of price gouging could then face a fine for each violation. Each fine could reach a maximum of $10,000. Current Maryland Attorney General Brian Frosh believes the tool is necessary tool. “The new law will give Maryland a necessary tool to combat unjustified and extreme prices for medicines that have long been on the market and that are essential to our health and wellbeing.
In their lawsuit, AAM complained that the law would cause market instability and encourage decrease competition. In return, they suggest the law will harm patients and the community, while reducing choices and limiting access to essential medications. The group is also unhappy with the fact that the law protects brand name drug companies and singles out generic drug manufacturers.
Maryland Governor Larry Hogan expressed similar concerns in May of this year, when he refused to sign the bill into law. Instead, he received enough votes to override his video and will thus go into effect without his signature.