A Roadblock in Maryland

By Zack Buck

In a 2-1 decision, a three-judge panel of the Fourth Circuit Court of Appeals has struck down Maryland’s pharmaceutical price-gouging law.

The law, which went into effect on October 1 of last year, prohibited drug manufacturers from imposing “unconscionable” price increases, empowering the state attorney general to assess civil penalties against drug manufacturers and to enjoin the sale of such drugs in Maryland.  The law applied only to essential off-patent or generic drugs, and specifically allowed the attorney general “to intervene if a generic or off-patent drug’s price increased by 50 percent or more in a single year,” in addition to acting on other “unjustified” increases.

The court, writing through Judge Stephanie Thacker, found that the law ran afoul of the “dormant” commerce clause, in that it empowered Maryland to regulate transactions that occurred completely outside of the state.

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