New Drug Pricing Legislation Introduced in Maryland

A few weeks after the United States Supreme Court rebuffed Maryland in its attempt to regulate drug prices, legislative committees are meeting Wednesday on a drug price transparency bill, as well as a bill to create a commission to review prices and set ceilings on insurers, pharmacies and hospitals.

The bills have been introduced in both the state Senate and the House of Delegates.

A version of each bill stalled in the legislature last year, The Washington Post reported, because of strong opposition from the pharmaceutical industry. This year, things are different given that the drug industry dropped its opposition since the bill also includes insurers and pharmacy benefit managers.

Maryland had previously attempted to regulate drug prices with a bill that gave Attorney General Brian E. Frosh (D) the ability to sue drug companies if prices rose sharply. But the United States Supreme Court rejected the state’s appeal of a 2018 federal appeals court ruling that struck down the law, which aimed at preventing price-gouging by pharmaceutical companies. The federal ruling held that Maryland had regulated wholesale pricing by the companies in violation of the Constitution's bar on state-level regulation of interstate commerce beyond its borders.

If the bill regarding a pricing commission is signed into law, the resulting 5-person commission would be modeled after the state’s Health Services Cost Review Commission, which sets limits on hospital spending growth, capping what state entities pay.

The body would be an independent unit of government with certain powers, including the ability to review prescription drug costs, request information from manufacturers, and allow the attorney general to pursue “certain remedies.”

For nearly the past 2 months, Congress has been holding hearings on rising drug prices, such as one about skyrocketing insulin costs in the Senate Finance Committee and a House committee hearing that zeroed in on prices for adalimumab (Humira) and Etanercept (Enbrel), both of which have FDA-approved but as-yet unlaunched biosimilars.

And although most focus on drug affordability has been centered on Washington, DC, Maryland not the only state looking to tackle the problem. The National Academy for State Health Policy is tracking bills across the country in the areas of affordability review, price gouging, pharmacy benefit managers, importation, volume purchasing, and more.