Judge Rules Maryland's Drug Pricing Law Unconstitutional

Last week, a federal appeals court in Maryland ruled that a law, passed in 2017 and aimed at combatting increases in the price of generic medicines, is unconstitutional.

The Association for Accessible Medicines (AAM) filed a suit against the state in a US district court in Maryland last year, alleging that the bill grants the state “unprecedented powers to regulate the national pharmaceutical market, violating the [US] Constitution and posing harm to vulnerable patient communities.”

The bill targeted “price gouging” in the sale of off-patent or generic drugs by requiring the Maryland Medical Assistance Program to notify the state’s attorney general of an increase in the prices of such medicines. In addition, it authorized the attorney general to require a drug manufacturer to turn over its records concerning the drug, and permitted a circuit court to compel action or impose penalties of up to $10,000 per infraction on the drug manufacturer.

In a 2 to 1 ruling, the 4th Circuit Court of Appeals found that the law would regulate trade beyond Maryland’s borders, which violates the so-called dormant commerce clause. Judge Stephanie D. Thacker wrote an opinion that ordered a lower-level federal judge to bar the law from taking effect.

“Maryland cannot, even in an effort to protect its consumers from skyrocketing prescription drug costs, impose its preferences in this manner,” wrote Judge Thacker.

This ruling comes as a disappointment for Maryland Attorney General Brian Frosh, who supported the bill and helped get it passed in the General Assembly in 2017.

“We remain committed to pursuing efforts to eliminate price gouging and to safeguarding Marylanders’ access to prescription drugs,” Frosh told The Baltimore Sun.

The president of the AAM, Chip Davis Jr., JD, was pleased with the outcome, saying in a statement that, “As AAM has always maintained, this law, and any others modeled from it, would harm patients because the law would reduce generic drug competition and choice, thus resulting in an overall increase in drug costs due to increased reliance upon more costly branded medications."