Greene & Padula. Targeting Unconscionable Prescription-Drug Prices — Maryland’s Anti–Price-Gouging Law. N Engl J Med 2017; 377:101-103
Excerpts:
..... Why, in the early 21st century, are so many drugs that were cheaply available in the 20th century becoming prohibitively expensive? The past few years have seen a series of dramatic price hikes on essential off-patent medications, from albendazole to albuterol, digoxin to naloxone, Daraprim to EpiPen. In the storm of allegations and indignation that has followed each of these revelations, one explanation has remained consistent.
...... To paraphrase Senators Susan Collins (R-ME) and Claire McCaskill (D-MO), who were the chair and the ranking member of the Senate Special Committee on Aging, firms that corner the market on off-patent medications and raise prices wildly often do so simply because they can. When the committee issued a 130-page report last December documenting the parallel strategies used by firms to engage in monopolistic price gouging on older essential drugs, the senators pointed out that these actions, though arguably unethical, have so far not been found to be illegal.
..... Until now. In April, the Maryland General Assembly voted by substantial, bipartisan majorities to pass legislation prohibiting price gouging on essential off-patent or generic drugs; by the end of May, this bill had passed into law. The law authorizes Maryland’s attorney general to prosecute firms that engage in price increases in noncompetitive off-patent–drug markets that are dramatic enough to “shock the conscience” of any reasonable consumer.
...... Manufacturers of innovative drugs will not be affected, nor will the majority of generic drug manufacturers, who collectively generated $1.7 trillion in cost savings over the past decade by participating in competitive markets to bring drug prices down. Rather, the law specifically targets companies that intentionally pursue a strategy of hiking prices on noncompetitive off-patent drugs.
...... Rather than inhibiting competition, it will deter manufacturers who would take a page from the playbook of Amedra (which raised prices on albendazole), Turing (pyrimethamine), or Valeant (penicillamine and isoproterenol) by exploiting noncompetitive drug markets for short-term profit through unconscionable behavior that imperils public health and individual welfare.