Maryland generics pricing bill becomes law without Gov. Hogan’s signature

ANNAPOLIS, Md. — A bill passed by Maryland’s state legislature became law without Gov. Larry Hogan’s signature late last week. The bill is designed to allow the state’s attorney general to take action against drug makers that raise prices of a drug beyond a certain threshold, and generally seeks to increase transparency in how generics are priced, including itemizing the components of the cost of producing a generic.

And though the measure did become law, it also did so without the governor’s signature and with his trepidation about the bill noted in a letter he sent to the Maryland House speaker on May 26. Among his concerns is the broad basis on which the threshold for price increases is defined, using terms like “unconscionable” and “excessive.”

“These terms are at the heart of the legislation, and because they have been so broadly drafted, it is very difficult for manufacturers to know whether they are in violation of these provisions, leaving the decision entirely to the interpretation of the Attorney General.

Hogan also noted that for a bill that looks to address high costs of medicines, it does not address branded medication, focusing instead on off-patent and generic drugs.

“This legislation only addresses the pricing of generic and off-patent pharmaceuticals, and does nothing to address the cost of patented products and medical devices which may be associated with drug delivery,” Hogan said in the letter. “This oversight, whether inadvertent or deliberate, is troubling since the patented or brand-name pharmaceuticals make up a significant amount of the market and are often times the most expensive and essential pharmaceuticals.

According to the most recent report from the Association for Accessible Medicines, the generics industry makes up 89% of filled prescriptions and 27% of the cost.

“I am not convinced that this legislation is truly a solution to ensuring Marylanders have access to essential prescription drugs, and may even have the unintended consequences of harming citizens by restricting their access to these drugs,” Hogan’s letter said. “The legislation does have a laudable goal, to combat price-gouging of consumers for life-saving drugs, and I am supportive of that goal.”

The legislation is set to take effect on Oct. 1.