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Maryland has increased power over drug prices Posted 21/04/2017

The US Food and Drug Administration (FDA) announced on 2 March 2017 that the state of Maryland General Assembly was considering two bills that would require pharmaceutical companies to notify the state ahead of drug price increases. On 20 March 2017, one of these bills that sets out to ban excessive price increases for generics and off-patent drugs, was passed. In the US, legislation related to pharmaceuticals can vary across states [1].

FDA reported that the bill that will ban ‘price gouging’ was approved by the Maryland House of Delegates in a 137−4 vote. Thus, the legislation has now been advanced to the senate. This bill applies to essential generic medicines on the World Health Organization list. It also includes consideration of off-patient treatments that are not subject to significant market competition and would prohibit increases in prices of these products that are described as ‘excessive and not justified by the cost of producing the drug’. Should the price of a drug need to be increased, the Maryland Medical Assistance Program would be required to notify the Attorney General. The manufacturer of the specified drug would need to submit an accompanying statement within 20 days of the request being made.

It is reported that the bill will also allow the state’s attorney general to sue drug manufacturers if they are found to be price gouging. Court proceedings would determine if the increased price is ‘unconscionable’, and if it has any effects on the access to a critical therapy. Potential penalties for non-compliance are reported to be in the region of US$10,000 per day of non-compliance. 

The second bill that the assembly is considering would require drug manufacturers with a wholesale acquisition cost of over US$2,500 per year or course of treatment, to submit an annual report for all products. It is reported that these reports would include: research and development costs; manufacturing, advertising and regulatory costs; amounts spent on patient assistance programmes; and the company’s tax rates and received credits, in addition to the profits made. Again, failure to comply would carry penalties of US$10,000 per day for non-compliance.

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1. GaBI Online - Generics and Biosimilars Initiative. More US state legislation on biosimilars substitution [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2017 Apr 21]. Available from: www.gabionline.net/Policies-Legislation/More-US-state-legislation-on-biosimilars-substitution

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