Everyone supports containing skyrocketing prescription drug prices but SB 1023, sponsored by Sen. Joan Carter Conway (D-Baltimore City), and HB 1194, sponsored by Del. Joseline Pena-Melnyk (D-Anne Arundel & Prince George’s Counties), would actually just make the problem worse for Maryland patients and our economy.
Generic medicines represent 89 percent of prescriptions filled in the United States but account for only 26 percent of spending on drugs. Generics are so much less expensive than brand drugs and more affordable in the U.S. than in other developed countries because of a very well-functioning, hyper-competitive market.
SB 1023 and HB 1194 will supplant the free market competition that works so well for generics – 90 percent of all generic prescriptions filled with a copay are less than $20 – and will instead empower the Maryland state government, through the newly created Drug Cost Review Commission, to set drug prices and overregulate low-cost generics. This intervention might be better suited or intended for costly brand drugs with consistent price increases, but it does not make any sense for generics.
We need to increase competition, not chill it. To better serve the patients of Maryland, policymakers should explore enhancing the competition that has led to falling prices for generic medicines in the state. The overall price of generics fell more than 8 percent in 2016, and prices are down over 70 percent since 2008. Competition has led to generic prices falling for 18 straight months. Legislation ensuring these favorable trends continue is the best way to protect patient savings.
SB 1023 and HB 1194 also threaten Medicaid savings. In 2016, generics saved the state of Maryland $735 million.This bill would strip those savings.