Generic Trade Group Sues Maryland Over Drug Pricing Law

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The Association for Accessible Medicines, or AAM, has announced that it is suing the state of Maryland over a new law that is intended to regulate drug prices. The AAM is a trade group which represents the interests of US generic drug manufacturers. The new law, HB 631, became law in June even though Republican Governor Larry Hogan refused to sign the bill and talked about the potential for legal and Constitutional concerns.  The bill seeks to limit drug price spikes by fining generic drug producers who raise the price of their drugs too quickly or by too much.

The AAM released a statement on the passage of the bill and how it affects the pharmaceutical industry. “The discriminatory law, an unconstitutional overreach passed in June 2017 scheduled to take effect in October 2017, grants Maryland unprecedented powers to regulate the national pharmaceutical market, violating the United States Constitution and posing harm to vulnerable patient communitiesThe discriminatory law, an unconstitutional overreach passed in June 2017 scheduled to take effect in October 2017, grants Maryland unprecedented powers to regulate the national pharmaceutical market, violating the United States Constitution and posing harm to vulnerable patient communities,” the trade group said.

The group continued by saying that the law gave the state Attorney General “extreme, arbitrary enforcement powers and would allow him to substitute his judgment for that of the free market. Companies would be forced to read the mind of the Attorney General to determine if he thought their negotiated prices were ‘excessive.’extreme, arbitrary enforcement powers and would allow him to substitute his judgment for that of the free market. Companies would be forced to read the mind of the Attorney General to determine if he thought their negotiated prices were ‘excessive.’.”

The trade group and its generic pharma lawyers allege that the law violates the Commerce Clause of the US Constitution, claiming that it gives the state of Maryland the power to regulate interstate commerce. The Attorney General will be representing the state in the suit, and the law remains popular with healthcare activists. Vincent DeMarco, the President of the Maryland Citizens’ Health Initiative, a group which supports the bill, says that he believes the law will be upheld in court.

 

 

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In today’s fast-growing, highly regulated generic pharmaceutical market, companies increasingly require specialized legal guidance as their products are developed, launched, and litigated. Wilson Sonsini Goodrich & Rosati’s attorneys address this need by providing expert counsel to companies in the global generics industry, offering sophisticated representation far beyond the scope of general corporate and securities counsel.

We have assembled a highly experienced team of experts from a cross-section of the firm’s key practice areas, including intellectual property, litigation, antitrust, FDA/regulatory, technology transactions, exports and FCPA, trade secret, and trademark and copyrights. Led by the former chief legal officer of Mylan Pharmaceuticals, one of the world’s leading generic and specialty pharmaceutical companies, our attorneys work closely with our generic pharmaceutical clients’ legal and scientific personnel and senior management to understand and meet their specific needs both in the U.S. and abroad.

 

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