Late Monday, Maryland’s House of Delegates signed off on a bill seeking to prohibit companies from overcharging for generic drugs.

Under the bill, the Maryland Medical Assistance Program would be required to notify manufacturers of an essential generic drug and the attorney general of a specified increase in the price of the essential generic drug. The bill would also require a manufacturer of an essential generic drug to submit a specified statement to the attorney general within 20 days after receiving a request for an explanation of a price increase.

In terms of how much of a price increase would be too much, the bill notes that generic drugs seeing increases of more than 50% in their wholesale acquisition costs over one year would be considered price gouging.

Maryland’s attorney general may require a manufacturer or wholesale distributor to produce any records or other documents that may be relevant to determining a violation. And on petition of the attorney general, a circuit court may impose a civil penalty of up to $10,000 for each violation.

The bill passed the House with a vote of 137-4, and now moves to the Senate. But the bill has been drastically re-worked since it was first introduced in February, when it not only required generic but any pharmaceutical companies to offer a peek into their innerworkings and required companies' annual reports to be audited by third parties.

Maryland Price Gouging Bill