Maryland House Passes Bill to Stop Generic Price Gouging

The Maryland House of Delegates recently passed a bill aimed at preventing drugmakers from price gouging for generic drugs, according to recent reports.

Maryland House Bill 631 was passed with nearly unanimous support in a 137-4 vote. The bill would require that generic drugmakers notify the Maryland Attorney General of a planned price increase and provide the specific details of the increase. The specific details must be submitted to the Attorney General within 20 days of receiving a request from the State. Drugmakers could also face a request for an explanation of a drug’s price increase.

Under the bill, price increases could not exceed 50% of the drug’s list price. Language within the bill describes prices that exceed these levels as “unconscionable increases.”

The Attorney General would also have the power to demand that drugmakers turn over any records of documents associated with the price increase, in order to determine if a drug price increase violates the law.  The bill also gives the Attorney General power to levy up to a $10,000 civil penalty for each violation, via a Maryland circuit court.

The bill has been retooled in order to pass through the House, with the removal of a requirement for annual auditing of drugmakers by third-party auditors.

Maryland HB 631 will now move to the Senate for a vote.

According to reports from STAT, three other states have pursued similar legislation to curtail generic drug price increase. Similar bills are moving through the legislature in New York and Massachusetts, while a bill has failed to gather support in Rhode Island. —David Costill