Maryland Sued Over Drug Price Gouging Law

by: Shantella Y. Sherman Special to the AFRO ssherman@afro.com
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As Marylanders face an uphill battle against opioid drug addictions and a sharp increase in chronic health conditions, a formidable trade group for generic pharmaceuticals has filed a lawsuit seeking to block Maryland legislation that would keep them from being able to raise prices beyond reasonable rates.

The Association for Accessible Medicines (AAM) filed the lawsuit in federal court in Baltimore, June 28, seeking an injunction to block state officials, including Maryland Attorney General Brian Frosh, from investigating and fining drug manufacturers who hike the prices of drugs based on increased need.

Prescription drug

Pharmaceutical companies, represented by AAM said in a statement that the law is discriminatory and represents an “unconstitutional overreach” and an attempt to regulate the national pharmaceutical market.

“Although proponents of the new law claimed that the bill would allow the Attorney General to sue pharmaceutical ‘price gougers,’ the law actually protects high-priced brand name drug companies, while it punishes lower cost generic alternatives,” Chip Davis, the group’s chief executive, said in a statement. “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 – of generic drugs, the only segment of health care costs that is actually declining.”

Under the current law, the attorney general could seek an explanation from the manufacturer and sue to protect consumers, with a fine of up to $10,000 for each violation. A judge could order the company to reverse its price increase.

AAM estimates generic drugs save Marylanders billions of dollars each year — $4.1 billion in 2016.

Yolanda Hopkins, finance director for the Laurel-based Twain & Associates Financial, told the AFRO that while she understood the desire for legal remedies to address escalating drug costs, the nature of supply and demand and basic commerce, make the current law unconstitutional.

“When it comes to life-saving drugs, there should be a type of regulation that reigns in all drug companies – not just those manufacturing generics.  It is almost as if they are being singled out,” Hopkins said. “It may seem unconscionable to upcharge for drugs like Epinephrine Auto-injectors (Epi-pens) for anaphylaxis, or Naloxone, used for opioid overdoses, but no business can be forced to lower their prices.  Still, a jump from $50 to $600 – the case with the EpiPen – seems excessive.”

Frosh joined Baltimore Health Commissioner Dr. Leana Wen, Baltimore County Executive Kevin Kamenetz, Prince George’s County Executive Rushern Baker, representatives from Maryland Health Care for All, churches, the NAACP and the state medical society to lay out arguments against the AAM’s position at a June 28 hearing.

“We want drug manufacturers to make profits. We want them to produce generic drugs,” Frosh told the Senate Finance Committee. “But when they acquire and abuse monopoly powers, they hurt patients, they threaten our health care system and they damage our communities.”

Baker, whose wife has Alzheimer’s disease, said he once had to pay for one of her prescriptions out of pocket, even though he has a generous insurance plan through the county. The drug, Namenda, used to cost $150 for a one-month supply. It costs Baker $350, he said.

Roughly 300 generic drugs have more than doubled from 2010 to 2015, according to a 2016 report by the U.S. Government Accountability Office.  Almost 8 percent of Americans don’t take their medication as prescribed because of a lack of affordability, according to a 2015 CDC report.

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