A Maryland price-gouging law, which gave the state attorney general power to intervene if the price of a generic or off-patent drug increased by 50 percent or more in a single year, was ruled unconstitutional by a federal appeals court panel. If the law remained in place and the attorney general was dissatisfied with the price-hike justification, manufacturers would have faced fines of up to $10,000 for violations.
The court held that, by providing Maryland with “unprecedented powers to regulate the national pharmaceutical market,” the law overstepped boundaries on what a state can do to control commerce outside its borders.
The law was part of a growing wave of state legislation designed to control the cost of drugs: California requires drug makers to justify price increases of more than 16 percent in two years and New York limits what its Medicaid program will pay for drugs.
Sources: STAT News, April 13, 2018; NBC News, April 18, 2018.