Maryland could become the first state to give its attorney general the power to take legal action against drug companies that dramatically increase the price of off-patent or generic drugs under a measure that is moving through the General Assembly.
Attorney General Brian E. Frosh (D) proposed the legislation, which received final approval in the Senate on Friday. The House passed the measure last month, and now the two chambers must reconcile the differences in the bill before the General Assembly adjourns Monday at midnight.
The vote on the price-gouging bill was among a flurry of activity in the legislature during the final days of its session.
A Senate committee broke through a logjam and voted unanimously to advance portions of the Trust Act, a bill to limit police cooperation with federal immigration enforcement efforts. After debating the legislation for more than two weeks, the 11-member panel decided to tuck the least-controversial parts into a separate immigration-related measure that will move to the full Senate on Monday.
The surviving proposals would bar local and state police from stopping or questioning individuals solely to determine their immigration status or country of origin, and from creating registries based on factors that could be used for discrimination, such as race and religion.
The committee dropped sections that would prohibit jurisdictions from detaining undocumented prisoners past their release date on behalf of immigration authorities.
“It doesn’t go as far as some would like it to go, and it goes further than others would like, and that is a good compromise,” said Sen. Robert A. Zirkin (D-Baltimore County), who chairs the panel.
Gov. Larry Hogan (R) has vowed to veto the Trust Act, which was passed by the House last month two votes shy of a veto-proof majority. It was unclear whether the governor would also reject the alternative legislation that was advanced by the Senate committee Friday.
The price-gouging bill is part of a national response to soaring drug costs.
Last year, the U.S. Senate opened an investigation into the dramatic spike in EpiPen’s price, which has increased more than fivefold since 2007.
Frosh said Friday that he hopes the legislation will address what has become a “life-or-death situation” for some Maryland residents. “We hope it will stop price-gouging of drugs that people are dependent on to stay alive or to function normally,” he said.
The legislation is limited to generic and off-patent drugs that experience “unconscionable” price increases. The attorney general would be authorized to take action if a manufacturer raises the cost of a drug to a level considered unjustifiable.
A 2016 study by the U.S. Government Accountability Office found that nearly a third of about 1,400 generic drugs had at least one “extraordinary” price increase of 100 percent or more between 2010 and 2015.
Under the bill, the attorney general would be able to take legal action if the price is not justified based on the drug’s manufacturing and distribution costs. A manufacturer would have 45 days to respond to a complaint from the attorney general, who would be required to meet with the company before filing suit against it.
Caitlin A. Carroll, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, which represents the country’s leading drug companies, said in a statement that the bill goes too far.
“Maintaining a competitive marketplace for generic medicines is critical for ensuring more patients can ultimately access innovative medicines at lower costs,” Carroll said. “While PhRMA is committed to addressing egregious behavior that stems from a lack of competition, we continue to have concerns about the broad and ambiguous powers this bill grants to the Office of the Maryland Attorney General.”
Sen. Robert G. Cassilly (R-Harford), who voted against the bill, said the measure exceeds the attorney general’s authority.
“I’m not in favor of price-gouging, but I am in favor of the Constitution,” Cassilly said, explaining his vote on the floor. “This puts an excessive amount of power in one man.”
Also Friday, the Senate approved a bill designed to make the state’s ethics laws stronger. Hogan and lawmakers have pushed for bills to increase financial-disclosure requirements and expand the definition of a conflict of interest. Senate President Thomas V. Mike Miller Jr. (D-Calvert) amended the bill Friday to increase the penalty for bribery, raising it to a $10,000 fine and a 12-year prison sentence.
The amendment came on the same day that Sen. Nathaniel T. Oaks (D-Baltimore) was charged in a bribery scheme.
In the House, lawmakers unanimously passed a job creation bill from Hogan that would provide a property and income tax credit to new manufacturing businesses in high-unemployment areas such as Baltimore, Western Maryland and the lower Eastern Shore for 10 years.
The House also gave preliminary approval to an overdose-prevention bill that would create a new felony category punishable by up to 10 years in prison for distributing fentanyl, a highly potent synthetic opioid.
Fatal fentanyl overdoses have skyrocketed over the past several years. The latest data from the state health department shows that the number of Maryland overdose deaths related to the drug surged to 738 from January through September of last year, compared with 22 during the same period in 2013.