Maryland Price-Gouging Legislation to Become Law Without Governor’s Signature

HB 631, Maryland’s first-in-the-nation “price gouging” bill, will become law without the signature of Governor Larry Hogan (R).  In a letter to Maryland Speaker of the House Michael Busch (D), Hogan stated that he would not sign the legislation due to concerns that it could violate the “dormant” application of the Commerce Clause of the U.S. Constitution.  However, Hogan declined to veto the legislation, which passed on April 10, 2017.

The new law will allow the Attorney General to seek penalties for “unconscionable” increases in the price of “essential off-patent or generic drugs” for which exclusive marketing rights have expired, that have been designated essential medicines, and that are manufactured for sale in the US by 3 or fewer manufacturers.  A primary concern of stakeholders is the legislation’s failure to provide sufficient guidance as to what constitutes an “unconscionable” increase.

The legislation takes effect October 1, 2017.  More detail on HB 631 can be found here.

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