Fourth Circuit Court of Appeals Finds Maryland Drug Price Law Unconstitutional

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Court Ruling

Sponsored content – The Fourth Circuit Court of Appeals handed drug manufacturers a victory in April when it ruled that Maryland’s drug price law, which was designed to limit massive increases in drug prices, was a violation of the Commerce Clause and therefore unconstitutional. The decision is big for drug manufacturers because it gives them a favorable ruling which can be used to challenge the laws like the one in Maryland that have been enacted in other states.

The Commerce Clause is a part of the United States Constitution that has been held to limit the ability of states to regulate commerce, under the theory that only Congress has the ability to enact laws that affect commerce (the sale of goods and services, generally) between the states because uniformity in the laws that affect interstate commerce is necessary to the regular functioning of that commerce. When states enact laws that impose rules that are different from others states on activity that is conducted in different states, it becomes a question as to whether the state is regulating activity that takes place primarily within its borders.

“Drug companies will be ecstatic about this decision, because assuming it holds up and is not overturned by an appeal to the United States Supreme Court, it gives them the ability to attempt to invalidate the numerous state laws attempting to control drug prices,” said Angie DiPietro, a Maryland drug crimes attorney with the law firm of Price Benowitz, LLP. Maryland’s law was designed to only be triggered when Maryland’s Medicaid program received notice of an increase in the wholesale price of a drug that increased the cost 50 percent or more over the prior year’s cost, or when the cost for one month’s dose of a generic drug exceeded $80. If triggered, the state attorney general would send a letter to the drug manufacturer requesting information supporting the increase. If the increase was found to be “unconscionable” and unsupported, the state could levy penalties and seek recovery on behalf of consumers.

The Fourth Circuit determined that because the wholesale prices were applied to all states, Maryland’s attempt to regulate and punish pricing changes would interfere with interstate commerce by attempting to control transactions conducted completely outside of the state. The case has been remanded back to the trial court for findings in accordance with those holdings; however, the decision may still be appealed by Maryland to the Supreme Court.

Drug prices have been in the news due to the unsavory practices of several pharmaceutical companies related to generic drugs that they produce. Control of drug prices are certainly in the public interest, but it seems as though controlling those prices will remain with Congress for the time being.

About the sponsor: Attorney Angie DiPietro has defended many criminal offenses in either District Court or Circuit Court. She is a panel attorney for the Office of the Public Defender. This sponsored content is provided by Wicomico criminal defense attorney Angie Dipietro with the law firm of Price Benowitz, LLP.

The material published in this article is sponsored content and not a product of the Baltimore Fishbowl editorial team. Any opinions expressed in this material do not necessarily represent the views of Baltimore Fishbowl.

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