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Frosh, county officials ask consumers for price gouging stories

Tim Curtis
Daily Record Business Reporter
October 31, 2017

Maryland officials have begun the public rollout of the state’s first-in-the-nation prescription drug price gouging law by soliciting price gouging stories from citizens.
Elected officials from Montgomery County and Prince George’s County joined Attorney General Brian Frosh at Riderwood Village, a senior living community in Silver Spring, to encourage people to submit stories of increasing drug prices so Frosh can begin to identify targets for the new law.
“Generic drugs have been one of the few bargains in American health care for generations,” Frosh said. “In recent years, the prices of generic drugs have started to skyrocket.”
Under the law, which went into effect Oct. 1, Frosh may investigate and take legal action against the manufacturers of off-patent drugs determined to be price gouging. The bill limits the attorney general’s powers to only off-patent or generic drugs and those considered essential. It also only applies to drugs with three or fewer manufacturers on the market.
The generic drug industry has fought Maryland’s legislation, arguing that it will hurt Maryland consumers. It has sued in federal court to try to stop the law.
“(The Association for Accessible Medicines) believes that the Maryland law will harm patients by destabilizing the competitive market for affordable generic medicines,” said Jeffrey K. Francer, senior vice president and general counsel for the association. “The law provides no meaningful definition of the conduct it prohibits, and it places the Attorney General of Maryland in a position to regulate sales in other states, which violates the Commerce Clause of the U.S. Constitution.”
Last month, a federal judge denied the association’s request for an injunction and partially dismissed the case on the commerce clause argument. He allowed the case to continue on the grounds that law is too vague.
The association has appealed to the 4th Circuit Court of Appeals.
One way health advocates intend to get cases of potential price gouging in front of Frosh is by collecting consumer stories. The Maryland Citizens’ Health Initiative hosted Tuesday’s event and will be collecting the stories on its website.
From there, Frosh can determine what price increases have been “unconscionable” and seek to enjoin price increase from happening. He said it’s still unclear whether the law can be used to retroactively enjoin increases.
Baltimore City, Baltimore County, Montgomery County and Prince George’s County will also be promoting the initiative and encouraging citizens to send in their drug price stories.
For Prince George’s County Executive Rushern Baker III, the issue is personal. His wife was diagnosed with early onset dementia at age 48. Since then, she has been on two medicines that help her control seizures, drugs Baker said she will be on the rest of her life.
Over time he has seen the price of her medicine rise from $100 a month out-of-pocket, to having to pay a $100 copay every month.
“The market goes up anyway,” he said. “When you have a player who comes in and price gouges, it’s unconscionable.”
He was referring to companies that have become famous over the past couple of years, such as Turing Pharmaceuticals, which under former executive Martin Shkreli raised the price of AIDS drug Daraprim 5,000 percent.
Frosh did not buy into concerns that the Maryland law could mean generic drug companies do not do business in Maryland.
“We’re calling their bluff,” he said. “They threatened it. I don’t believe it would happen. … They make money if they sell it at half of what it is today, at a quarter of what it is.”

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