5 October 2017Americas

Generics trade group appeals drug pricing law decision

The Association for Accessible Medicines (AAM), a generics industry trade group, has appealed against a judge’s decision that cleared the way for a new drug pricing law in Maryland.

The law, known as House Bill 631, is designed to prohibit manufacturers from engaging in price gouging in the sale of essential off-patent or generic drugs.

It also authorises the attorney general to petition for injunctive relief, disgorgement of profits and a penalty of up to $10,000 for each violation.

Passed in April, the “Prohibition against price gouging for essential off-patent or generic drugs” came into effect on Sunday, October 1.

Maryland is the first state in the US to enact a law on price gouging by generic manufacturers.

AAM had fought to block the bill at the US District Court for the District of Maryland, claiming that the law is unconstitutional because it is “impermissibly vague”.

“Though cast as a local economic regulation, HB 631’s sweeping price control reaches into every corner of the US, if not beyond,” said the claim.

The trade group added that the law’s “sweeping price restraints are so vague” as to leave state officials tasked with implementing and enforcing the law with nearly unbounded discretion.

On Friday, September 29, District Judge Marvin Garbis handed down an order denying AAM’s request for injunctive relief, clearing the way for the law.

Garbis rejected the trade group’s argument that the law had violated the “dormant commerce clause”.

Under the clause, states are free to pass legislation if the law doesn’t discriminate against interstate commerce.

However, Garbis allowed AAM to continue litigation under the argument that the law is too vague.

In a press release issued on Friday, AAM said it was disappointed with the court’s decision but that it would immediately appeal to the US Court of Appeals for the Fourth Circuit.

“As AAM has stated from the outset, this law will hurt patient access to safe, affordable generic medicines in Maryland and the rest of the US, and will create untenable uncertainty for generic drug makers who may be left with no choice but to abandon markets altogether,” said the trade group.

Yesterday, October 4, AAM appealed to the Fourth Circuit.

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