Inside Augusta

Should California be able to set drug prices in Maine?

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Imagine if California passed a law telling Maine lobstermen how much to charge for their lobsters – in Maine.  The idea isn’t just ridiculous, it would be unconstitutional. That’s why it’s so disappointing that the Maine Legislature passed a bill, LD 1117, that proposes to regulate prices outside the state. Governor Mills must veto it.

LD 1117 is intended to bring down prescription costs for Mainers, but it goes about this wrong. The law would target generic drug manufacturers – even though generics bring down costs for patients. Data show that even though 90% of all prescriptions filled are generics, they account for only 20% of total prescription drug spending. Brand-name drugs – just 10% of prescriptions – make up 80% of spending. Of the top 25 costliest drugs for Maine, not one is generic, according to Maine’s Health Data Organization. Additionally, generics saved Maine $1.2 billion in 2019 alone, 92% of generic prescriptions cost $20 or less, and the average co-pay is less than $7.

LD 1117 is targeting the solution – not the cause – of high drug costs.

Beyond the bill’s ill-conceived target, LD 1117 is unconstitutional. It states that any generic drug manufacturer that raises the price of a drug it sells in another state is subject to fines and regulations from the state of Maine. Here’s the problem: We don’t know of a single generic drug manufacturer located in Maine, and so virtually every sale the bill regulates is made to distributors and pharmacies outside of Maine.

This is a blatant violation of the Constitution’s Interstate Commerce Clause, which states: “Congress shall have [the] Power … [t]o regulate commerce … among the several States.” The U.S. Supreme Court has long held that this means states can’t regulate commerce among each other, because that’s the sole responsibility of Congress. If this bill is signed into law, Maine would face legal challenges that will result in the law being struck down.

That is exactly what happened in Maryland when the state enacted a nearly identical price control bill in 2017. I helped lead a legal challenge on constitutional grounds, and the Fourth Circuit Court of Appeals struck the bill down. In addition, when a state passes an unconstitutional law that is struck down by the courts, it is responsible for paying the challenger’s legal costs.  So Maryland taxpayers were burdened with significant legal fees.

If Governor Mills signs LD 1117, then we will inevitably see the same result: years of legal battles and court fees, ending in the bill being ruled unconstitutional—and remember that if that happens, the state has to pay for the entire case.

Another issue with bills like LD 1117 is the precedent it would set. What if every state had the power to set the prices of products sold in other states? Fifty different state laws all regulating the same transactions would create massive uncertainty, confusion and chaos in the marketplace.  Complying with one might mean violating another.  The result would be to reduce access to lifesaving and health-maintaining medicines that millions of patients around the country rely on each day.

That kind of chaos is why the Framers put the Commerce Clause in the Constitution, why the Supreme Court and courts around the country have enforced the Commerce Clause time and time again, and why bills like LD 1117 will consistently be struck down.

It is absolutely important to promote policies that increase access to more affordable prescription drugs. But state price controls on affordable generic medicines sold outside of Maine are not the answer. We need market-based solutions that improve generic drug competition and ensure patients have access to more affordable medicines.

LD 1117 is an unconstitutional and misguided bill that will only disrupt and reverse the savings that Mainers already have thanks to generic medicines. For the sake of Maine’s patients and taxpayers, it is essential that Gov. Mills reject this bill.

About Jeffrey Francer

Jeffrey Francer is Senior Vice President and General Counsel of the Association for Accessible Medicines, where he leads legal and international trade advocacy

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