Generic industry's initial effort to halt Maryland price law rebuffed by judge

A new drug pricing law that focuses on the generic industry has taken effect in Maryland.

Taking a tough stance against Maryland's new pricing regulations, the generic drug industry sought an injunction, hoping to stop the law in its tracks. But the industry's efforts for relief have come up short, at least for now.

U.S. District Judge Marvin Garbis ruled that some of the industry's arguments have merit, but he denied the industry's request for a preliminary injunction. Further, he denied in part and granted in part the state's motion to dismiss the industry's lawsuit, leaving Maryland's law in effect for now, according to the office of Maryland Attorney General Brian Frosh.

The Association for Accessible Medicines, or AAM, represents the generic drug industry and sued state officials to try to stop implementation of HB 631, which outlaws "unconscionable" price hikes in Maryland. Generic drugmakers argued the law will impact commerce outside of Maryland, stands to harm the public and is unconstitutionally vague. 

On the claims of vagueness, Judge Garbis wrote that there are "reasonable—though not necessarily prevailing—contentions asserted" by AAM. He said the industry "has presented a plausible claim that HB 631 may be void for vagueness" and accordingly denied the state's motion to dismiss the lobbying group's lawsuit. 

Unlike other approaches to regulate drug pricing throughout the country, Maryland's law focuses specifically on the generic sector. If Frosh feels there's been a violation of the price hike law, he could ask a court to force drug companies to roll back their price increases and pay up to $10,000 for each violation. 

Generic companies said that because they operate nationally, the law could disrupt operations and impact commerce outside of Maryland. Judge Garbis didn't agree with the assertion. 

"Because many physical consumer products must conform to differing state requirements, this argument is unpersuasive," Garbis wrote in the new order. "AAM has not offered a reason for why its members—who are leading manufacturers and distributors of generic drugs in this country—could not apply a tracking system to determine which of their drugs are eventually made available for sale in Maryland." 

The development in court comes as many states take pricing regulation into their own hands and as the issue hasn't progressed much in Washington, D.C. In a separate fight across the country, the drug industry fell short in Nevada at an attempt to block transparency legislation, which there focuses on the diabetes market and pharmacy benefit managers. All told, lawmakers in 30 states have drafted some 60 drug price transparency bills as of August, according to the National Academy for State Health Policy. 

For its part, Massachusetts recently sent a request to the federal government asking for the ability to reject paying for some drugs, potentially boosting its negotiating power and providing relief on costs. In Ohio, pricing advocates and industry are fighting over a ballot proposal that would limit prices to those paid by the U.S. Department of Veterans Affairs. California voters rejected a similar proposal last year.