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Judge allows drug ‘price gouging’ law to go into effect in Maryland

Washington Examiner
Kimberly Leonard
September 29, 2017

A federal judge on Friday refused to block a Maryland law aimed at expensive generic drug pricing from going into effect.

The dismissal is a blow to the Association for Accessible Medicines, which represents generics and initiated the lawsuit. The organization said it was reviewing the decision.

U.S. District Judge Marvin Garbis denied the association’s request for an injunction as a lawsuit proceeds, so the law will go into effect Sunday as scheduled.

The law, passed in April and formally known as the “Prohibition Against Price Gouging for Essential Off-Patent or Generic Drugs,” gives the state attorney general authority to challenge drug companies when they have significantly raised the prices of a generic drug to an “unconscionable” level or one that is “excessive” and “not justified.”

Advocates say they hope the law can reduce healthcare costs and health insurance premiums. Opponents, including generic drugmakers, counter that the law’s language is too vague and likely violates the Constitution. They note that prescription drug prices are not set by states and that the power to regulate interstate commerce belongs to the federal government. They also say that a law that targets drug prices should have been aimed at new drugs coming to market, rather than generics.

Garbis is allowing litigation to proceed on the association’s contention that the law is vague, but dismissed its other arguments, writing that the association did not persuade him the law “is substantially likely to be held unconstitutional.”

“Moreover, the court finds that an erroneous grant of a preliminary injunction would cause substantial harm by permitting the sale of essential drugs to Maryland residents at unconscionable prices,” Garbis wrote.

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