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Prescription Drug Affordability Initiative

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Maryland Enacts Landmark Prescription Drug Price Gouging Law

Working with Attorney General Brian Frosh and our broad based Prescription Drug Affordability Coalition, we successfully advocated for Maryland’s new landmark price gouging law. Effective October 1, 2017, this law will grant the Attorney General the authority to hold pharmaceutical companies accountable for “unconscionable” increases in generic or off-patent drugs.  This measure has the potential to rein in rising health care costs, reduce health insurance premiums and promote more equitable health outcomes.

An “unconscionable” price increase is one which is excessive and unjustified, and which results in harm to consumers because of the importance of the drug to their health and because there is insufficient market competition to ensure access to the drug.

If the Attorney General determines that unconscionable price gouging has occurred, the Attorney General must allow a manufacturer or wholesaler the opportunity to meet with the Attorney General to discuss the matter before taking legal action. The Attorney General may then go to State Circuit Court, which can provide these remedies:

  1. Require the manufacturer or wholesaler to provide relevant information sought by the Attorney General,
  2. Issue an order restraining or enjoining price gouging activities,
  3. Restore money to consumers lost as a result of price gouging,
  4. Require the manufacturer to make the drug available to participants in Medicaid and other state health programs at the pre gouging price for up to a year,
  5. Impose a civil penalty of up to $10,000 for each violation.

The statute will also:

  1. authorize the Medicaid Department of the Department of Health and Mental Hygiene to provide notification to the Attorney General of certain drug price increases;
  2. make clear that wholesale distributors cannot be held liable for price increases directly attributable to the manufacturer:
  3. and, protect the confidentiality of certain information provided to the Attorney General by manufacturers or wholesalers.

More information on Maryland’s landmark price gouging law:

 

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We have more work to do

Prescription drugs account for one of the fastest growing segments of health spending in the US. Nationally, we’ve seen figures that indicate spending on high-cost drugs alone is expected to more than quadruple from $87 billion dollars in 2012 to $400 billion in 2020. Containing rising health care costs means containing prescription drug prices.

Our new law is only a start. We need your help to advocate for additional legislation to rein in rising prescription drug prices.

If you want to help us build on our success, take action!