Judge Refuses Request for Injunction Against Maryland’s Generic Price-Gouging Law

October 4, 2017

A federal judge declined to block Maryland’s new law on generic drug price-gouging that went into effect Oct. 1, but said a challenge based on the law’s vagueness can proceed.

The Association for Accessible Medicines had asked Judge Marvin J. Garbis of the U.S. District Court for the District of Maryland to issue an injunction against the law before it took effect.

The law allows the state’s attorney general to challenge drug prices deemed unreasonable for essential generic medicines. The law also limits increases in wholesale acquisition costs to under 50 percent over a one-year period.

Garbis ruled to allow a complaint that the law is “vague” to proceed, but dismissed the group’s argument that the law violated the Constitution’s dormant Commerce Clause as applied to sales between out-of-state-manufacturers and wholesale distributors. In its initial lawsuit, the group argued that drugmakers and distributors do not make pricing decisions at the state level, and thus the legislation overstepped the state’s jurisdiction over interstate commerce.

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