The Washington PostDemocracy Dies in Darkness

Opinion Larry Hogan should veto Maryland’s drug-pricing bill

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As a former attorney general of Kentucky and consumer protection co-chair of the National Association of Attorneys General, I am well aware that the high cost of prescription drugs is an issue that rightly makes national headlines and is justifiably a priority for consumers and lawmakers.

Recent actions of the Maryland legislature to address this issue led to the passage of HB 631, which purports to give broad pharmaceutical anti-price-gouging authority to the Maryland attorney general. Maryland policymakers should be careful about the unintended consequences of that bill that may actually hurt consumers instead of helping them.

The single biggest policy problem with the Maryland legislation is that it focuses solely on the generic drug manufacturers and unequivocally exempts brand-name pharmaceutical companies from similar scrutiny. I understand the brand-name pharmaceutical industry has powerful lobbyists; however, it makes little sense to exempt such a broad category of manufacturers if you are trying to control the spiraling costs of drugs. In fact, recent studies show that the generic drug manufacturers actually saved Maryland consumers $4.1 billion in 2016.

By targeting the generic drug manufacturers, this piece of legislation may actually drive away the very producers who are saving the Maryland consumers money. While we are all concerned about drug pricing, this bill could make matters worse by reducing access to the most affordable medicines available.

Additionally, Maryland’s HB 631 appears to be unconstitutional. When I was attorney general, Kentucky experienced problems with price-gouging legislation that contained vague terms such as “gouging” or “excessive,” which courts have repeatedly ruled are void because they are unconstitutionally vague and subjective. In addition, Maryland’s bill would violate the interstate commerce clause of the Constitution by attempting to regulate the sale of medicine to other states.

I count the Maryland attorney general as a friend, and I appreciate his efforts to help the consumers of Maryland save money. However, this legislation probably would cost the state significantly as it litigates its unconstitutionality. More important, because of the unacceptable business risks that would be created by the bill, generic drug manufacturers would be motivated to leave the state or, even worse, abandon manufacturing certain low-margin generic medicines, which would reduce access and availability of affordable medicine for all Marylanders.

HB 631 awaits the governor’s signature or veto. I encourage Gov. Larry Hogan (R) to veto this bill because it targets only one segment of a broader industry and could send the message that Maryland’s business environment can be unfair and unpredictable. While the intent of this legislation may have been to protect consumers, it clearly would have unintended consequences. It would be best for all involved for the legislature to go back to the drawing board on the issue of pharmaceutical price-gouging and draft a bill that is constitutional, gives the state attorney general the tools he needs to go after the real bad actors in the industry and ensures the availability of affordable medicine to the people of Maryland.

Jack Conway, a Democrat, is a former Kentucky attorney general.