The Association for Accessible Medicines, a U.S. trade group representing generic drug companies, on July 6 filed a lawsuit to block a new state law allowing the Maryland attorney general to sue generic drugmakers for price hikes, reports Reuters.
Here are four things to know.
1. Maryland's Democrat-led legislature passed the law in April. Republican Governor Larry Hogan did not sign the law, but permitted it to go into effect.
2. Under the law, Maryland's state authority on Medicaid may notify the attorney general's office when drugmakers make an "unconscionable increase" on crucial generic drugs. The attorney general would be allowed to ask the drugmaker for an explanation of the price hike and sue the company for up to $10,000 per violation. A judge could also order the drugmaker to undo the price increase.
3. AAM seeks an injunction to block state officials from enforcing the law. The trade group, which represents companies like Mylan and Teva Pharmaceuticals, filed the lawsuit in a Baltimore federal court.
"Rather than allow the vibrant competition in the generic drug marketplace to continue working for patients, Maryland would become the first state to reject generic competition in favor of more government regulation of generic drugs, the only segment of healthcare costs that is actually declining," said AAM CEO Chip Davis. "If this new law goes into effect, it will harm patients and our communities by reducing choice and limiting access to essential medicines that people need."
4. A spokeswoman for the Maryland attorney general's office said it received the lawsuit and plans to review it, according to Reuters.
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