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Advocates call for drug price caps in wake of Supreme Court decision

01.06.14 BALTIMORE, MD- Stephen Wienner, Owner and Pharmacist at Mt. Vernon Pharmacy, shown here with some generic pharmaceuticals for a story about the rising price of generic drugs. (The Daily Record/Maximilian Franz)

Advocates for a new Maryland drug price board that could lower the price of brand name drugs hope that it would avoid the constitutional flaws that doomed the state’s fledgling generic drug price gouging law. (The Daily Record/Maximilian Franz)

ANNAPOLIS — Undaunted by a Supreme Court decision on a Maryland law generic drug anti-price gouging law, a top health care advocate is calling for lawmakers to pass price caps on prescription drugs.

Vincent DeMarco, president of Maryland Citizens’ Health Initiative, said the decision by the nation’s top court to not hear an appeal lower court decision striking down the 2017 Maryland law is “a bad Supreme Court decision.”

“Maryland citizens are not protected at all now from ‘Pharma bro’ types who can just raise the price (of a drug) 5000 percent,’ said DeMarco. “The prescription drug affordability board (bill) would protect Marylanders from those kinds of increases.”

DeMarco said the state needs the legislation, which would create a board that would set upper limits on what state residents would pay for a drug sold in Maryland, “now more than ever.”

It’s unclear how the proposed price board would be able to overcome the constitutional shortcomings that doomed the generic drug price gouging law. DeMarco’s group also championed that law, which was overturned by the 4th U.S. Circuit Court of Appeals.

The legislation would allow the proposed new board to review high prices when a brand name drug launches and when there are significant increases in the price of brand name drugs. That includes drugs that launch at a price of more than $30,000 a year or which have price increases of $3,000 or more year to year.

The legislation would also allow the board to review prices for biosimilars and price increases for generic drugs.

After review, the board could set a limit on how much Marylanders would pay for that drug, something DeMarco said is different than the price controls in the anti-price gouging law.

“It’s not a price limit, it’s an upper payment limit on what people pay — not what the price is,” said DeMarco, adding that the price of insulin, as an example, in another state would still be the price set by the manufacturer but that Maryland residents could end up seeing a lower price set by a board similar to the one that now sets costs for hospitals.

“Nobody pays the rest,” DeMarco said of the difference between the price set by the board in Maryland and what manufacturer’s price under the bill he backs. “Maybe (drug companies) will have to cut their advertising or some of the other things they don’t have to pay for.”

Drug companies see price restrictions as obstacles to lowering the overall cost of drugs. The Pharmaceutical Research and Manufacturers of America, PhRMA, said the drug board bill “misses the mark.”

“It recycles failed ideas that give government broad authority to arbitrarily set prices and undermine the competitive market that is critical to bringing down costs and delivering new treatments to patients,” Nick McGee, a PhRMA spokesman, said in a statement.

A counter-proposal in the legislature would require more reporting on drug prices from manufacturers, pharmacy benefit managers and insurance companies.

The law, which was to go into effect Oct. 1, 2017, would have prohibited a significant price increase of an essential off-patent or generic drug. It would have given the Maryland attorney general the power to order the manufacturer to explain the reasons behind a significant price boost as well as request a court order restraining or enjoining a violation.

The Supreme Court Tuesday declined to hear the attorney general’s appeal in Brian E. Frosh et al. v. Association for Accessible Medicines, No. 18-546.

The justices let stand without comment a 4th U.S. Circuit Court of Appeals decision that the state’s effort to regulate generic drug transactions occurring outside the state violates the Constitution’s Commerce Clause. The clause holds that regulations on interstate commerce are the province of Congress, not state legislatures, the 4th Circuit ruled.

Opponents argued if the law was allowed to stand it would allow Maryland to effectively dictate prices on generic drugs nationwide.

Reporter Tim Curtis contributed to this story.

 


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