A Baltimore Sun article (2018-04-13) reported that the 4th Circuit Court of Appeals in a 2-1 ruling has struck down a Maryland law regulating prices on generic drugs as violating the dormant commerce clause. The recently enacted law (HB 631 of 2017) was heavily supported by Maryland Attorney General Brian Frosh and was designed to protect consumers from rapidly increasing generic medicine costs. The law allowed the Office of the Attorney General to review generic drug prices and order price reductions or fines if the Office determined the prices increased too steeply without a valid reason.
The case was brought against Frosh and then-Maryland Secretary of Health Dennis Schrader by the Association for Accessible Medicines (AAM). The holding is the first of its kind and could chill the efforts of other states to address generic drug prices.
From the article:
“To be clear, we in no way mean to suggest that Maryland and other states cannot enact legislation meant to secure lower prescription drug prices for their citizens,” [majority opinion author Judge Stephanie Thacker] wrote. “Although we sympathize with the consumers affected by the prescription drug manufacturers’ conduct and with Maryland’s efforts to curtail prescription drug price gouging, we are constrained to apply the dormant commerce clause.” …
Judge James A. Wynn dissented from the majority opinion, saying the other judges had interpreted the commerce clause too broadly. Wynn wrote that their ruling would stop “Maryland from protecting its citizens against unconscionable pricing practices by out-of-state generic drug manufacturers.”
The article noted that Frosh is considering the State’s options, which include requesting an en banc review by all the 4th Circuit judges or appealing the case to the United States Supreme Court.