Gov. Janet Mills stopped yet another unsound drug pricing bill in her most recent stream of vetoes last week.
Wielding her pen more freely these last few weeks, Mills has issued 16 vetoes so far this session.
“Whether as District Attorney, Attorney General, or as Governor, I have never shied away from a legal battle that I knew was right and that would benefit the people of Maine. This is not such an occasion. The risks associated with this legislation are high, and the potential reward is low.”– Janet Mills in her veto message for LD 1117.
LD 1117, sponsored by Senate President Troy Jackson (D-Aroostook), was a bill that aimed to prevent “excessive price increases” on off-patent and generic prescription drugs.
It was one of five prongs of the supposed “Making Health Care Work for Maine” package unveiled by Senate Democrats earlier this year, and it was paired with LD 675, sponsored by Sen. Ned Claxton (D-Androscoggin). Both bills aimed to lower the cost of prescription drugs through penalties, fines, and through the authority of the Attorney General.
LD 1117 had a noble goal, yes, but it went about achieving that end in entirely the wrong way.
The bill defined an “excessive price increase” as, using the Consumer Price Index to adjust for inflation, an increase of more than 20% of the wholesale acquisition cost per unit from the previous calendar year.
The Attorney General could then, if the Maine Health Data Organization deemed it an excessive price increase, seek an order from the Superior Court to restrain or enjoin a violation of the law, restore money to affected consumers, assess civil penalties of as much as $30,000 per day, or provide for any other kind of relief.
In her veto message, Mills listed three main reasons for the veto: Constitutional viability, the costly and lengthy litigation in which the bill would result, and how it would not make a significant impact on the money in Mainers’ pockets.
She invoked a similar law, HB 631, that went into effect in Maryland, and was successfully challenged in the Fourth Circuit U.S. Court of Appeals in 2018. The law was found to have violated the Commerce Clause of the U.S. Constitution, as it indirectly regulated out-of-state commerce.
Like LD 1117, HB 631 only applied to medications available in-state. The problem is that out-of-state manufacturers are ultimately liable for the price increases based on deals with out-of-state wholesalers. HB 631 did not survive scrutiny against this extra-territorial commerce regulation, and LD 1117 would not have either.
Being a former lawyer and attorney general herself, Mills absolutely has the credibility and legal acumen to speak on this issue.
Another point she raises is that the bill solely targets off-patent prescription drugs, which are already severely cheaper than on-patent, name-brand medications.
As shown in the above graphic from The Hospitalist, in recent years, generic drugs have actually decreased in costs while name-brand ones have risen, and the gap between them is larger than ever.
From 2009 to 2019, generic medication saved the U.S. healthcare system nearly $2.2 trillion, according to the IMS Health Institute.
Generic drugs already serve as a cheaper, more accessible substitute to expensive, name-brand ones. LD 1117 would have accomplished nothing in terms of lowering prescription drug costs for Mainers, and Mills was right to veto it. The Legislature must sustain her decision.