The AAM, which represents generics and biosimilar manufacturers and was previously known as the Generic Pharmaceutical Association, has taken issue with a recently passed law (HB 631) that claims to prevent generic drug price gouging.

The Bill, which was reported on back in April 2017 [1], grants Maryland the power to regulate the national pharmaceutical market, violating the US Constitution.

Furthermore, although the Bill claims to lower drug costs, it does not cover expensive brand-name pharmaceuticals – which account for 75% of total spending on prescription drugs – and instead penalizes lower-cost generic drugs. According to the AAM, the Bill would create ‘instability in the market’ for generic drugs and incentivize reduced generic drug competition.

The Association claims the law will affect other areas of the US and breaks the Constitution’s interstate commerce clause, which regulates trade between states. They also say that the Bill’s definition of price gouging (as ‘an unconscionable increase in the price of a prescription drug’) is too vague and would allow Maryland tremendous regulation abilities. The law makes it difficult for companies to determine if their negotiated prices are excessive or not and would give the Attorney General ‘arbitrary enforcement powers’, according to the AAM.

CEO Chip Davis said ‘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’. He warned that the Bill could harm patients by reducing their choice and access to medicines.

On the contrary, proponents say the law will outlaw ‘unconscionable’ price hikes in the generic drug industry and enable the state to ask companies to explain their drastic price increases, potentially forcing them to reduce their price hikes and pay up to US$10,000 for each violation.

The complaint by AAM was filed to Maryland federal court on 6 July 2017 and requests that the court block enforcement of House Bill 631, which is due to take effect in October 2017.

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Reference
1. GaBI Online - Generics and Biosimilars Initiative. Maryland has increased power over drug prices [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2017 Aug 11]. Available from: www.gabionline.net/Policies-Legislation/Maryland-has-increased-power-over-drug-prices

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