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AAM Requests Federal Injunction to Block Maryland’s Unconstitutional Drug Price Law

 

Generic Pharmaceutical Trade Group Steps in to Protect Patient Access To Affordable Generic Drugs

WASHINGTON, DC (JULY 6, 2017) – Today, the Association for Accessible Medicines (AAM), the trade association representing America’s manufacturers of generic and biosimilar medicines, filed a lawsuit against Maryland Attorney General Brian Frosh and Dennis Schrader, Secretary of the Maryland Department of Health, requesting that the Federal district court in Maryland enjoin them from enforcing House Bill 631. 

The discriminatory law, an unconstitutional overreach passed in June 2017 scheduled to take effect in October 2017, grants Maryland unprecedented powers to regulate the national pharmaceutical market, violating the United States Constitution and posing harm to vulnerable patient communities. The suit was filed in the United States District Court for the District of Maryland. 

The Maryland law claims to be intended to lower drug costs, but it curiously does not apply to Big Pharma which accounts for three-quarters of total prescription drug spending. This failure to include expensive brand name pharmaceuticals as well as its constitutional flaws were cited by Governor Larry Hogan when he chose not to sign the bill.  

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.  Frosh claims the law will help prevent increases in the price of pharmaceuticals. He’s wrong. Aside from being unconstitutional, the new law will create instability in the market for generic drugs and provide an incentive for decreased generic drug competition.

Chip Davis, CEO of AAM, 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 – of generic drugs, the only segment of health care costs that is actually declining.” Davis continued, “If this new law goes into effect, it will harm patients and our communities by reducing choice and limiting access to essential medicines that people need.”

How HB 631 Is Illegal:

HB 631 IS UNCONSTITUTIONAL & UNPRECEDENTED
Violates the Commerce Clause of the Constitution: The overreaching law gives Maryland unprecedented power to regulate interstate commerce, including businesses and transactions outside the state of Maryland.  Under our Constitution, Attorney General Frosh does not have the right to govern businesses in other states. 

HB 631 IS UNCONSTITUTIONALLY VAGUE
Violates the Constitutional Right to Due Process: People have a right to know when they are complying with or breaking the law. Through the poorly crafted and loosely worded law, the Maryland General Assembly has given the Attorney General extreme, arbitrary enforcement powers and would allow him to substitute his judgment for that of the free market.  Companies would be forced to read the mind of the Attorney General to determine if he thought their negotiated prices were “excessive.” 

Generic drugs are a true success story. Generic medicines account for 89% of all prescriptions, but they only account for 26% of drug costs. Year over year, generic drug prices fall, while brand name drug prices rise. The overall price of generics fell over 8% in 2016, and prices are down over 70% since 2008. In contrast, a recent study by AARP found, "average annual retail prices for brand name prescriptions increased at an all-time high rate in 2014 (16.1 percent) and the 2015 brand name drug prices increased nearly as much at a rate of 15.5 percent.”

Generics saved Maryland $4.1 billion, including state programs and your tax dollars – last year alone. 

AAM is committed to working with patients, healthcare professionals, advocacy groups, stakeholders, and policymakers to develop smart, balanced policies that expand access to lifesaving medicines. We cannot allow misguided or bad policy to hinder the progress we are making on behalf of our nation’s patients. More competition from generics is proven to lower costs and increase access for all Americans. It’s time to stop HB 631 and work together to pass a law that will help patients today and into the future.