HB 631 – Maryland

Status: Enacted
Year Introduced: 2017
Link: http://mgaleg.maryland.gov/webmga/frmMain.aspx?id=hb0631&stab=01&pid=billpage&tab=subject3&ys=2017rs,

Note: In April 2018, the 4th U.S. Circuit Court of Appeals found HB 631 unconstitutional because it violates the dormant commerce clause.  In Feb. 2019, the Supreme Court denied certiorari for Maryland’s appeal, so HB 631 is no longer in effect.

PROHIBITING A MANUFACTURER OR WHOLESALE DISTRIBUTOR FROM ENGAGING IN PRICE GOUGING IN THE SALE OF AN ESSENTIAL OFF-PATENT OR GENERIC DRUG: The new law defines an unconscionable price increase as an increase that is excessive and unjustified, and that harms consumers because of the drug’s importance for their health and because there isn’t enough market competition to ensure access to the drug. If the Maryland Attorney General concludes that unconscionable price gouging has happened, they have to meet with the drug manufacturers and wholesalers to talk. They then have the power to go to the State Circuit Court. The State Circuit Court can require a number of solutions: requiring drug manufacturers or wholesalers to provide relevant information to the Attorney General, issuing orders restraining or enjoining price gouging activities, restoring money to consumers lost as a result of price gouging, or requiring drug manufacturers to make the drug available to Medicaid enrollees at the pre gouging price for a year. Finally, the Court can impose a civil penalty of up to $10,000 for each violation.

Enacted as Md. Code Ann., Health-Gen. §§ 2-801 through 2-803.

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Associated Litigation:

Association for Accessible Medicines v. Frosh
District Court: District of Maryland    Status: Decided
In a significant victory for the pharmaceutical industry, the 4th U.S. Circuit Court of Appeals found Maryland’s landmark 2017 law (HB 631), which punishes generic drug manufacturers for price gouging, unconstitutional because it violates the dormant commerce clause. The April 2018 ruling reversed the lower court’s decision in a lawsuit …