Maryland Has a Plan to Fight Soaring Drug Prices

It could provide a cut-and-paste model for the rest of the country to follow.

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Oct 6 2017, 7:07pm

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The first anti-drug price gouging law that went into effect in Maryland on October 1 has already survived its first legal challenge, and may yet prove to be a cut-and-paste model for a nation generally pissed that drug makers are hiking the prices of medicines they need to live.

"The basic fact is there are folks all over Maryland and across the country that are sick and they cannot access these life saving medicines because of the cost," says Matthew Celentano, deputy director for policy and communications for the Maryland Citizens' Health Initiative.

Drug makers in the United States have largely abandoned treating the sick according to the Hippocratic Oath for a guiding philosophy of fuck you, pay me. The most hotly spotlighted cases are daraprim—an anti-parasitic drug used to treat people with AIDS which was jacked up from $13.50 per tablet to $750—and EpiPen which is a near-necessity for people with life-threatening allergies and whose prices have been raised "over 450 percent since 2004," according to a STAT report.

But these are hardly bad apple cases. "Generic drugs like doxycycline [a widely used antibiotic] have increased by 9,145 percent," says Arielle Thomas, a co-author of a Yale Global Health Justice Partnership report on unfair drug prices. It's hard to name a disease that isn't making bank these days. Diabetes? The cost of insulin has nearly tripled. Muscular dystrophy? That'll be eighty-nine grand, if you're buying in the US (but try overseas for the low, low price of $1,200). Chronic myelogenous leukemia? Hope you've been saving up for cancer.

Now, the Maryland Attorney General can do something about drug makers that are getting richer as the sick are getting sicker—they can prosecute drug makers for "an unconscionable increase in the price of a prescription drug," according to the letter of the new law. That can only happen under a few circumstances: The drug must be off-patent, it must be generic, it must manufactured and marketed by no more than three companies (that is, when there is little competition and patients have little choice), and drug makers must have a chance to explain themselves.


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Still, some counter that "unconscionable" is too vague to be meaningful—imagine if speed limits were as vaguely defined, argues the general counsel for a group of generic drug makers. But putting a clear price tag on what is too much, like 65 mph on the highway, might serve as an invitation to walk right up to the line of what is legal and what is unconscionable, and back it off just a little bit.

"Maryland legislators tried hard here to specify with sufficient precision what kinds of price increases would be justifiable and which wouldn't be," says Rachel E. Sachs, an associate professor at the Washington University School of Law. "If legislators had been as specific as the generic industry wants them to be—such as by stating a specific percentage beyond which price increases would be investigated—the industry could then take price increases up to that point with impunity."

Other opponents say that the high prices of drugs aren't examples of price gouging at all, but necessary increases for drug makers to recoup costs of research and development. Yet a Health Affairs study shows otherwise: Enough money is made by US drug companies that they could cover research and development and still save "US patients, businesses, and taxpayers approximately $40 billion" per year, if they operated like the rest of the world.

If anything, we are likely underestimating how badly we are being price gouged by some drug makers—after all, a significant percentage of research and development is taxpayer funded. "Consumers are paying for these drugs multiple times," explains Celentano. "We are paying for the development of these drugs through our tax dollars, we are paying through higher premiums in our health insurance costs, then we pay for them at the pharmacy again."

And people who need these medicines don't just pay for them once at the pharmacy either. In fact, when people can't afford these medicines, they are more likely to need them, since diseases tend not to magically cure themselves. "Many specialty drugs treat chronic illnesses like rheumatoid arthritis and multiple sclerosis—which means that patients who rely on these drugs must find a way to pay for them every single month," says David Certner, legislative counsel for the AARP. "Price increases for these critical drugs only worsen those problems and make it more likely that people with chronic illnesses are unable to adhere to the medications they need."

While Maryland is alone in passing an anti-drug price gouging law, the Yale Global Health Justice Partnership reports that "more than 80 pharmaceutical pricing bills were proposed in over 30 states" this year. Over the summer, Nevada passed a transparency law that makes pharma open their books on insulin pricing. And in September, California passed a bill that forces drug companies to explain themselves if they raise the cost of a drug by 16 percent or more.

But drug makers are not likely to go down without a very well-funded fight. Last November, for example, the pharmaceutical industry raised $109 million to defeat a California proposition to lower prescription drug prices.

"In any of the work I've done," says Mark Montigny, a Massachusetts State Senator and author of a proposed anti-price gouging bill, "I've never seen an industry more successful at killing important bills and jeopardizing lives.

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