Federal Court Calls State’s Law Against Price-Gouging ‘Unconstitutional’ | NPR

States are continuing to do battle with budget-busting prices of prescription drugs. But a recent federal court decision could limit the tools available to them — underscoring the challenge states face as, in the absence of federal action, they attempt on their own to take on the powerful drug industry.

The 2-to-1 ruling Friday by the U.S. Fourth Circuit Court of Appeals invalidated a Maryland law meant to limit “price-gouging” by generic drug manufacturers, inspired by cases such as that of former Turing Pharmaceutical CEO Martin Shkreli, who raised one generic drug’s price 5,000 percent after buying the company.

The law, which had been hailed as a model for other states, is one of a number of state initiatives designed to combat rapidly rising drug prices. It gave the state attorney general power to intervene if a generic or off-patent drug’s price increased by 50 percent or more in a single year.

If dissatisfied with the company’s justification, the attorney general could file suit in state court. Manufacturers could face a fine of $10,000 and potentially have to reverse the price hike. The generics industry was fiercely critical of the law.

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Federal Court Calls State’s Law Against Price-Gouging ‘Unconstitutional’ : Shots – Health News : NPR.