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Maryland law protects people from prescription drug price-gouging

With more than one in five Americans today not filling their prescriptions because of the cost, it’s time to bring down drug prices. While we wait for Congress to act, even generic drug manufacturers are hiking up some drug prices astronomically because they can. And, some states are fighting back. Maryland just passed the first of its kind bi-partisan prescription drug anti-price-gouging legislation to protect its residents from huge generic drug price increases.

Under Maryland’s new law, its attorney general can sue generic pharmaceutical companies for hiking up prices too high and return the money they win to people taking these drugs and other payers. The attorney general’s authority only extends to non-competitive markets, where three or fewer manufacturers are producing a drug. For meaningful competition, there needs to be four or more drug manufacturers.

To make the case, the attorney general must show that the price hike is legally “unconscionable” as well as unjustified, as Jeremy A. Greene and William V. Padula explain in this New England Journal of Medicine piece. The legislation, supported almost unanimously by Democrats and Republicans in the Maryland State legislature, addresses one of the public’s top policy priorities.

Generic drug corporations increasingly have been taking advantage of their ability to drive up generic drug prices enormously when the market for a drug is not competitive, simply because they can. Many of the generic drugs seeing huge price increases have been on the market for decades, such as insulin and albuterol, at a fraction of their current cost.  The Maryland Attorney General’s office is also suing six generic drug manufacturers for price-fixing in violation of anti-trust laws.

While Maryland’s legislation is a strong step forward, we need federal legislation to ensure fair drug prices. Maryland does not begin to have the resources to take on the drug companies in each instance that they gouge consumers. Reining in drug prices is a bi-partisan issue across the country, but we will need to see change in Washington D.C. before Congress is likely to pass any meaningful drug pricing legislation.

Of note, drug transparency legislation in Maryland, which would have given people notice of drug price increases, did not get passed.

If you want Congress to rein in drug prices, please sign this petition.

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