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New Maryland Anti-Price-Gouging Law Attempts to Reduce Drug Prices

Prescription PillsDid you know that the average cancer-related drugs in America have increased in price 500% to 1,000% over the last 15 years? Did you also know that the end-user cost of prescription drugs covered by Medicare Part B and Part D increased more than 80% on average in just four years (2011 to 2015)? Pharmaceuticals prices have increased exponentially, forcing many Americans to choose between life-saving medicine and losing their home.

In an attempt to curb this growing financial crisis, Maryland has recently implemented new legislation that stops pharmaceutical company “price gouging.” In particular, House Bill 631 penalizes drug manufacturers who knowingly increase the price of off-patent, generic, or necessary medications without being able to cite to a specific increase in production cost. This might seem like a fairly straightforward concept but it actually represents the first time legal price regulations have ever been enforced against drug companies.

The bill puts the power of enforcement into the hands of the attorney general, who will be tasked with monitoring and overseeing drug costs. If a market becomes noncompetitive, as in three or fewer manufacturers are able to produce and sell the drug, the attorney general will investigate the situation to see if price gouging is occurring. Before penalties are levied, a pharmaceutical company will be given a reasonable amount of time to explain the price hike. Penalties include $10,000 fines per violation and, more importantly, consumer reimbursement.

Should Other States Follow Suit?

Maryland’s own Governor Christopher Hogan has been openly vocal about his disapproval regarding HB 631. Fearing that the restrictions might actually make prescriptions more difficult to obtain by patients, he is skeptical of its use as well as its enforceability. It might be found that the bill actually violates the Constitutional Dormant Commerce Clause, which deals with interstate commerce. If this is true, the bill could become invalid.

With these potential issues in mind, other states may be hesitant to follow in Maryland’s footsteps. Other legislative groups around the country will be watching the fate of this bill. It is, however, a good indicator that lawmakers are at least attempting to rein in out-of-control drug costs to protect consumers.

The Law Offices of Robert Vaage is a trusted San Diego personal injury law firm that stands up for the rights of people all around Southern California. If you have been harmed by a defective medical product, including a dangerous drug, you can contact our firm for legal assistance.