Generic makers fail to stop drug pricing law
- Following a ruling by a U.S. District Court judge, Maryland will implement the House Bill 631, a bill designed to allow state Attorneys General to take action against drug manufacturing raising prices by excessive amounts and curb any price-gouging activities from the industry.
- On Friday, a lawsuit filed by the generic drugmakers' trade body the Association for Accessible Medicines (AAM) failed to block the recently-enacted bill, despite reports of recognition by the district court that it might be "unconstitutionally vague."
- The law will go into effect this weekend and does not apply to branded drugs that are still under patent protection. AAM plans an immediate appeal, noting one state does not have the right to restrict out-of-state commerce like this law intends to do.
In a statement, Jeff Francer, SVP and general counsel of the Association for Accessible Medicines, said that the trade group was "disappointed with the district court’s decision not to enjoin Maryland’s price gouging statute."
AAM sees the law both as lacking enough clarity to be applied under the due process clause and as unconstitutional under the commerce clause of the U.S. Constitution as applied to out-of-state transactions. According to Reuters, the U.S. District Judge Marvin Garbis has said that litigation may continue over any vagueness in the law, but he has dismissed the other arguments.
AAM plans an immediate appeal to the U.S. Court of Appeals for the Fourth Circuit, as it believes that there is precedent that "restricts states from directly regulating wholly out-of-state commercial activity as HB 631 does here."
The House Bill 631 allows state Attorneys General, starting with Maryland, to demand documentation supporting certain price increases. This aims to stop some of the startling price rises seen over the past year or two, particularly those taken by generic drugmakers.
While this law is aimed at generics, branded drugmakers have been just as careless about price increases in recent years. Some of the biggest offenders were cases such as Valeant Pharmaceuticals International raising the price of heart drugs Isuprel (isoprenaline) and Nitropress (nitroprusside) by 720% and 310%, respectively, or Ariad Pharmaceuticals' (now owned by Takeda) almost doubling the cost of its chronic myeloid leukemia drug Iclusig (ponatinib) over a four year span. And perhaps the most startling – Questcor, now part of Mallinckrodt, increasing the price of Acthar Gel by 85,000%, from $40 in 2001 to $34,000 per vial in 2014.
The Association for Accessible Medicines argues, though, that the bill will have a negative rather than a positive effect on the affordability of drugs. "This law will hurt patient access to safe, affordable generic medicines in Maryland and the rest of the U.S. and will create untenable uncertainty for generic drug makers who may be left with no choice but to abandon markets altogether."
- Association for Accessible Medicines Statement
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