Maryland House of Delegates passes bill on prescription drug price gouging by vote of 137 to 4

On March 20, 2017, the Maryland House of Delegates approved a prescription drug price gouging bill by a vote of 137-4. A copy of the bill, as it passed the House, is attached.

This is a March 20, 2017 Report by Erin Cox, published in the Baltimore Sun:

Maryland’s attorney general could sue drug companies for price gouging under a bill approved by the House of Delegates Monday.

Under the legislation a drug price increase by more than 50 percent would trigger a report to the attorney general, who would have power to demand an explanation for the increase.

The proposed law also allows the state’s top lawyer to ask a judge to determine whether a drug company implemented an “unconscionable increase” to a critical prescription medicine. The measure allows a judge to fine the drug company, as well as order refunds to consumers.

Attorney General Brian E. Frosh sought the new authority.

The measure, which passed 137-4, now moves to the Senate, which has held a hearing on the matter but not advanced the companion bill. The annual General Assembly session adjourns in three weeks.

The Maryland Health Care for All Coalition, along with a group of experts from Johns Hopkins University led by Dr. Reshma Ramachandran, worked with the state Attorney General Brian Frosh to pass the bill. This is a statement by Vincent DeMarco, President of the Maryland Health Care for All Coalition, on the House Passage of HB 631, Prescription Drug Price Gouging Bill on March 20, 2017

“We commend the Maryland House of Delegates for passing this life-saving measure authorizing Attorney General Brian Frosh to take legal action to stop prescription drug price gouging. We call on the State Senate to do the same and for Governor Hogan to sign this measure into law.”

Summary of Prescription Drug Price Gouging Bill, HB 631/SB 415

The bill would authorize the Attorney General to take legal action to prevent price gouging on off-patent medications. Specifically, the Attorney General would be able to take action if the manufacturers of an off-patent or generic drug make an “unconscionable increase” in the price of the drug, defined as an excessive increase that is not justified by the cost of producing or distributing the drug. “Unconscionable” is not a moral term but a legal doctrine, invoked when consumers have no other option but to purchase an essential product at its new inflated price. Maryland would help lead the nation to make off-patent pharmaceutical price gouging an actionable offense, and it is hoped that this law will act as a deterrent against the future Martin Shkrelis of the world. This is especially important when very little is likely to happen at the federal level on this issue.

Under the new bill, the Maryland Medicaid Assistance Program would report to the Attorney General when rapid or excessive price increases occur in off-patent or generic prescription drug products. The Attorney General would be authorized to request additional information from the corporations who instituted these price increases to help determine if price gouging has occurred.